株探米国株
英語
エドガーで原本を確認する
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Index
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________________________________
FORM 10-Q
__________________________________________
(Mark One)
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2023
OR
o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________to
Commission File Number 001-37399
__________________________________________
KEARNY FINANCIAL CORP.
(Exact name of registrant as specified in its charter)
__________________________________________
Maryland 30-0870244
(State or other jurisdiction of
incorporation or organization)		 (I.R.S. Employer
Identification Number)
120 Passaic Ave., Fairfield, New Jersey
07004
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code
973-244-4500
__________________________________________
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading Symbol(s) Name of each exchange on which registered
Common Stock, $0.01 par value KRNY The NASDAQ Stock Market LLC
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filers,” “accelerated filers,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer x Accelerated filer o
Non-accelerated filer o Smaller reporting company o
Emerging growth company o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x
The number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: April 28, 2023.
$0.01 par value common stock — 66,083,509 shares outstanding KEARNY FINANCIAL CORP.

Index
AND SUBSIDIARIES
INDEX
Page
Number

Index


KEARNY FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(In Thousands, Except Share and Per Share Data)
March 31,
2023		 June 30,
2022
(Unaudited)
Assets
Cash and amounts due from depository institutions $ 18,520  $ 26,094 
Interest-bearing deposits in other banks 176,048  75,521 
Cash and cash equivalents 194,568  101,615 
Investment securities available for sale (amortized cost of $1,408,194 and $1,462,124, respectively)
 1,267,066  1,344,093 
Investment securities held to maturity (fair value of $136,125 and $108,118, respectively)
 149,764  118,291 
Loans held-for-sale 5,401  28,874 
Loans receivable 5,966,325  5,417,845 
Less: allowance for credit losses on loans (49,122) (47,058)
Net loans receivable 5,917,203  5,370,787 
Premises and equipment 49,589  53,281 
Federal Home Loan Bank (“FHLB”) of New York stock 76,319  47,144 
Accrued interest receivable 28,794  20,466 
Goodwill 210,895  210,895 
Core deposit intangibles 2,590  3,020 
Bank owned life insurance 291,220  289,177 
Deferred income tax assets, net 53,151  49,350 
Other real estate owned 13,410  178 
Other assets 89,366  82,712 
Total Assets $ 8,349,336  $ 7,719,883 
Liabilities and Stockholders' Equity
Liabilities
Deposits:
Non-interest-bearing $ 617,778  $ 653,899 
Interest-bearing 5,185,626  5,208,357 
Total deposits 5,803,404  5,862,256 
Borrowings 1,611,692  901,337 
Advance payments by borrowers for taxes 18,706  16,746 
Other liabilities 49,304  45,544 
Total Liabilities 7,483,106  6,825,883 
Stockholders' Equity
Preferred stock, $0.01 par value, 100,000,000 shares authorized; none issued and outstanding
 —  — 
Common stock, $0.01 par value; 800,000,000 shares authorized; 66,679,988 shares and 68,666,323 shares issued and outstanding, respectively
 667  687 
Paid-in capital 509,359  528,396 
Retained earnings 452,605  445,451 
Unearned employee stock ownership plan shares; 2,408,373 shares and 2,558,895 shares, respectively
 (23,348) (24,807)
Accumulated other comprehensive loss (73,053) (55,727)
Total Stockholders' Equity 866,230  894,000 
Total Liabilities and Stockholders' Equity $ 8,349,336  $ 7,719,883 
See notes to unaudited consolidated financial statements.
- 1 -
Index
KEARNY FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In Thousands, Except Per Share Data)
(Unaudited)
Three Months Ended
March 31,		 Nine Months Ended
March 31,
2023 2022 2023 2022
Interest Income
Loans $ 60,172  $ 45,846  $ 171,103  $ 141,651 
Taxable investment securities 15,459  8,024  39,119  23,831 
Tax-exempt investment securities 99  316  603  976 
Other interest-earning assets 1,441  415  3,207  1,261 
Total Interest Income 77,171  54,601  214,032  167,719 
Interest Expense
Deposits 22,246  3,565  51,937  11,293 
Borrowings 12,554  3,309  26,410  10,422 
Total Interest Expense 34,800  6,874  78,347  21,715 
Net Interest Income 42,371  47,727  135,685  146,004 
Provision for (reversal of) credit losses 451  (3,920) 2,792  (11,740)
Net Interest Income after Provision for (Reversal of) Credit Losses 41,920  51,647  132,893  157,744 
Non-Interest Income
Fees and service charges 910  617  2,407  1,922 
Gain (loss) on sale and call of securities —  3  (15,227) 4 
(Loss) gain on sale of loans (2,373) 376  (1,844) 2,352 
Gain on sale of other real estate owned —  14  —  14 
Income from bank owned life insurance 1,581  1,511  7,040  4,634 
Electronic banking fees and charges 457  432  1,360  1,260 
Other income 1,071  238  5,349  938 
Total Non-Interest Income 1,646  3,191  (915) 11,124 
Non-Interest Expense
Salaries and employee benefits 18,005  19,184  58,274  55,897 
Net occupancy expense of premises 3,097  3,223  9,174  10,926 
Equipment and systems 3,537  3,822  11,066  11,370 
Advertising and marketing 413  516  1,891  1,356 
Federal deposit insurance premium 1,546  480  3,678  1,693 
Directors' compensation 340  340  1,019  1,792 
Other expense 3,414  3,058  9,888  9,062 
Total Non-Interest Expense 30,352  30,623  94,990  92,096 
Income before Income Taxes 13,214  24,215  36,988  76,772 
Income tax expense 2,902  6,522  8,190  20,595 
Net Income $ 10,312  $ 17,693  $ 28,798  $ 56,177 
Net Income per Common Share (EPS)
Basic $ 0.16  $ 0.25  $ 0.44  $ 0.78 
Diluted $ 0.16  $ 0.25  $ 0.44  $ 0.78 
Weighted Average Number of Common Shares Outstanding
Basic 64,769 69,790 65,181 72,130
Diluted 64,783 69,817 65,191 72,154
See notes to unaudited consolidated financial statements.
- 2 -
Index
KEARNY FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(In Thousands, Unaudited)
Three Months Ended
March 31,		 Nine Months Ended
March 31,
2023 2022 2023 2022
Net Income $ 10,312  $ 17,693  $ 28,798  $ 56,177 
Other Comprehensive Income (Loss), net of tax:
Net unrealized gain (loss) on securities available for sale 6,903  (41,922) (27,299) (52,354)
Net realized (gain) loss on sale and call of securities available for sale —  (2) 10,811  (3)
Fair value adjustments on derivatives (10,931) 17,387  (806) 23,227 
Benefit plan adjustments (4) 14  (32) 37 
Total Other Comprehensive Loss (4,032) (24,523) (17,326) (29,093)
Total Comprehensive Income (Loss) $ 6,280  $ (6,830) $ 11,472  $ 27,084 
See notes to unaudited consolidated financial statements.
- 3 -
Index
KEARNY FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(In Thousands, Except Per Share Data, Unaudited)
Common Stock Paid-In
Capital 		Retained
Earnings		 Unearned
ESOP
Shares		 Accumulated
Other
Comprehensive
Income (Loss)		 Total
Shares Amount
Balance - December 31, 2021 73,453 $ 735  $ 587,392  $ 431,549  $ (25,780) $ 1,574  $ 995,470 
Net income — —  —  17,693  —  —  17,693 
Other comprehensive loss, net of income tax — —  —  —  —  (24,523) (24,523)
ESOP shares committed to be released (51 shares)
 — —  180  —  486  —  666 
Stock repurchases (2,020) (21) (26,948) —  —  —  (26,969)
Stock-based compensation expense — —  676  —  —  —  676 
Cancellation of shares issued for restricted stock awards (9) —  (124) —  —  —  (124)
Cash dividends declared ($0.11 per common share)
 — —  —  (7,720) —  —  (7,720)
Balance - March 31, 2022 71,424 $ 714  $ 561,176  $ 441,522  $ (25,294) $ (22,949) $ 955,169 

Common Stock Paid-In
Capital 		Retained
Earnings 		Unearned
ESOP
Shares		 Accumulated
Other
Comprehensive
Income (Loss)		 Total
Shares Amount
Balance - June 30, 2021 78,965 $ 790  $ 654,396  $ 408,367  $ (26,753) $ 6,144  $ 1,042,944 
Net income — —  —  56,177  —  —  56,177 
Other comprehensive loss, net of income tax — —  —  —  —  (29,093) (29,093)
ESOP shares committed to be released (151 shares)
 — —  486  —  1,459  —  1,945 
Stock repurchases (7,468) (75) (95,892) —  —  —  (95,967)
Stock-based compensation expense — —  3,117  —  —  —  3,117 
Cancellation of shares issued for restricted stock awards (73) (1) (931) —  —  —  (932)
Cash dividends declared ($0.32 per common share)
 — —  —  (23,022) —  —  (23,022)
Balance - March 31, 2022 71,424 $ 714  $ 561,176  $ 441,522  $ (25,294) $ (22,949) $ 955,169 
See notes to unaudited consolidated financial statements.
- 4 -
Index
KEARNY FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(In Thousands, Except Per Share Data, Unaudited)
Common Stock Paid-In
Capital		 Retained
Earnings 		Unearned
ESOP
Shares 		Accumulated
Other
Comprehensive
Loss		 Total
Shares Amount
Balance - December 31, 2022 67,388 $ 674  $ 515,332  $ 449,489  $ (23,834) $ (69,021) $ 872,640 
Net income — —  —  10,312  —  —  10,312 
Other comprehensive loss, net of income tax — —  —  —  —  (4,032) (4,032)
ESOP shares committed to be released (50 shares)
 — —  (1) —  486  —  485 
Stock repurchases (698) (7) (6,685) —  —  —  (6,692)
Stock-based compensation expense — —  811  —  —  —  811 
Cancellation of shares issued for restricted stock awards (10) —  (98) —  —  —  (98)
Cash dividends declared ($0.11 per common share)
 — —  —  (7,196) —  —  (7,196)
Balance - March 31, 2023 66,680 $ 667  $ 509,359  $ 452,605  $ (23,348) $ (73,053) $ 866,230 

Common Stock Paid-In
Capital 		Retained
Earnings 		Unearned
ESOP
Shares 		Accumulated
Other
Comprehensive
Loss		 Total
Shares Amount
Balance - June 30, 2022 68,666 $ 687  $ 528,396  $ 445,451  $ (24,807) $ (55,727) $ 894,000 
Net income — —  —  28,798  —  —  28,798 
Other comprehensive loss, net of income tax — —  —  —  —  (17,326) (17,326)
ESOP shares committed to be released (150 shares)
 — —  105  —  1,459  —  1,564 
Stock repurchases (2,008) (21) (21,109) —  —  —  (21,130)
Issuance of stock under stock benefit plans 61 1  (1) —  —  —  — 
Stock-based compensation expense — —  2,407  —  —  —  2,407 
Cancellation of shares issued for restricted stock awards (39) —  (439) —  —  —  (439)
Cash dividends declared ($0.33 per common share)
 — —  —  (21,644) —  —  (21,644)
Balance - March 31, 2023 66,680  $ 667  $ 509,359  $ 452,605  $ (23,348) $ (73,053) $ 866,230 
See notes to unaudited consolidated financial statements.
- 5 -
Index
KEARNY FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands, Unaudited)
Nine Months Ended
March 31,
2023 2022
Cash Flows from Operating Activities:
Net income $ 28,798  $ 56,177 
Adjustment to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of premises and equipment 4,353  4,470 
Net accretion of yield adjustments (4,306) (4,374)
Deferred income taxes 3,150  6,943 
Amortization of intangible assets 430  539 
(Accretion) amortization of benefit plans’ unrecognized net (gain) loss (44) 60 
Provision for (reversal of) credit losses 2,792  (11,740)
Gain on sale of other real estate owned —  (14)
Loans originated for sale (76,852) (151,783)
Proceeds from sale of mortgage loans held-for-sale 101,054  167,713 
Loss (gain) on sale of mortgage loans held-for-sale, net 1,899  (2,260)
Realized loss (gain) on sale/call of investment securities available for sale 15,227  (4)
Realized gain on sale of loans receivable (55) (92)
Realized gain on disposition of premises and equipment (2,886) (356)
Increase in cash surrender value of bank owned life insurance (7,040) (4,634)
ESOP and stock-based compensation expense 3,971  5,062 
Increase in interest receivable (8,328) (155)
Decrease in other assets 93  6,679 
Increase in interest payable 9,073  49 
Decrease in other liabilities (13,428) (15,125)
Net Cash Provided by Operating Activities 57,901  57,155 
Cash Flows from Investing Activities:
Purchases of:
Investment securities available for sale (166,483) (206,145)
Investment securities held to maturity (40,398) (86,406)
Proceeds from:
Repayments/calls/maturities of investment securities available for sale 100,149  280,496 
Repayments/calls/maturities of investment securities held to maturity 8,831  2,586 
Sales of investment securities available for sale 105,199  — 
Purchase of loans (702) (112,485)
Net increase in loans receivable (559,794) (36,895)
Proceeds from sale of loans receivable 706  1,126 
Purchase of interest rate contracts (758) — 
Proceeds from the sale of other real estate owned —  494 
Additions to premises and equipment (1,255) (1,859)
Proceeds from death benefit of bank owned life insurance 4,997  300 
Proceeds from cash settlement of premises and equipment 3,480  599 
Purchase of FHLB stock (84,310) (7)
Redemption of FHLB stock 55,135  5,625 
Net Cash Used in Investing Activities (575,203) (152,571)
See notes to unaudited consolidated financial statements.
- 6 -
Index
KEARNY FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(In Thousands, Unaudited)
Nine Months Ended
March 31,
2023 2022
Cash Flows from Financing Activities:
Net (decrease) increase in deposits (58,613) 43,903 
Repayment of term FHLB advances (4,615,000) (1,170,000)
Proceeds from term FHLB advances 5,120,000  1,045,000 
Net increase in other short-term borrowings 205,000  290,000 
Net increase in advance payments by borrowers for taxes 1,960  1,227 
Repurchase and cancellation of common stock of Kearny Financial Corp. (21,130) (95,967)
Cancellation of shares repurchased on vesting to pay taxes (439) (932)
Dividends paid (21,523) (23,291)
Net Cash Provided by Financing Activities 610,255  89,940 
Net Increase (Decrease) in Cash and Cash Equivalents 92,953  (5,476)
Cash and Cash Equivalents - Beginning 101,615  67,855 
Cash and Cash Equivalents - Ending $ 194,568  $ 62,379 
Supplemental Disclosures of Cash Flows Information:
Cash paid during the period for:
Income taxes, net of refunds $ 8,618  $ 9,497 
Interest $ 69,707  $ 21,666 
Non-cash investing and financing activities:
Acquisition of other real estate owned in settlement of loans $ 13,232  $ 703 
Transfers from loans receivable to loans receivable held-for-sale $ 2,628  $ — 
See notes to unaudited consolidated financial statements.
- 7 -
Index
KEARNY FINANCIAL CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
1.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation
The unaudited consolidated financial statements include the accounts of Kearny Financial Corp. (the “Company”), its wholly-owned subsidiary, Kearny Bank (the “Bank”) and the Bank’s wholly-owned subsidiaries. The Company conducts its business principally through the Bank. Management prepared the unaudited consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”), including the elimination of all significant inter-company accounts and transactions during consolidation.
Basis of Presentation
The accompanying unaudited consolidated financial statements were prepared in accordance with instructions for Form 10-Q and Regulation S-X and do not include the information or footnotes necessary for a complete presentation of financial condition, income, comprehensive income, changes in stockholders’ equity and cash flows in conformity with GAAP. However, in the opinion of management, all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of the unaudited consolidated financial statements have been included. The results of operations for the three months and nine months ended March 31, 2023 are not necessarily indicative of the results that may be expected for the entire fiscal year or any other period.
The data in the Consolidated Statement of Financial Condition at June 30, 2022 was derived from the Company’s 2022 Annual Report on Form 10-K. That data, along with the interim unaudited financial information presented in the Consolidated Statements of Financial Condition, Income, Comprehensive Income, Changes in Stockholders’ Equity and Cash Flows should be read in conjunction with the audited consolidated financial statements, including the notes thereto, included in the Company’s 2022 Annual Report on Form 10-K.
The accounting and reporting policies of the Company conform to U.S. GAAP and to general practice within the financial services industry. A discussion of these policies can be found in Note 1, Summary of Significant Accounting Policies, included in the Company’s 2022 Annual Report on Form 10-K. There have been no material changes to the Company’s significant accounting policies since June 30, 2022.
2.    SUBSEQUENT EVENTS
The Company has evaluated events and transactions occurring subsequent to the statement of financial condition date of March 31, 2023, for items that should potentially be recognized or disclosed in these consolidated financial statements. The evaluation was conducted through the date this document was filed.
On April 27, 2023, the Company declared a quarterly cash dividend of $0.11 per share, payable on May 24, 2023 to stockholders of record as of May 10, 2023.
3.    RECENT ACCOUNTING PRONOUNCEMENTS
In March 2022, the Financial Accounting Standards Board (the “FASB”) issued ASU 2022-02, “Financial Instruments-Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures” to improve the usefulness of information provided to investors about certain loan refinancings, restructurings and writeoffs. ASU 2022-02 eliminates the accounting guidance for troubled debt restructurings by creditors and enhances disclosure requirements for certain modifications made to borrowers experiencing financial difficulty. In addition, ASU 2022-02 requires public business entities to disclose current-period gross writeoffs for financing receivables and net investments in leases by year of origination in the vintage disclosures. For entities that have adopted ASU 2016-13, the amendments in ASU 2022-02 are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022. Early adoption is permitted if an entity has adopted ASU 2016-13, including adoption in an interim period. If an entity elects to early adopt the amendments in ASU 2022-02, the guidance should be applied as of the beginning of the fiscal year that includes the interim period. An entity may elect to early adopt the amendments about TDRs and related disclosure enhancements separately from the amendments related to vintage disclosures. The amendments in ASU 2022-02 should be applied prospectively, but for the amendments related to the recognition and measurement of TDRs, an entity has the option to apply a modified retrospective transition method that would result in a cumulative-effect adjustment to retained earnings in the period of adoption. The Company is currently evaluating the impact of the adoption of this ASU on its consolidated financial statements.
- 8 -
Index
Adoption of New Accounting Standards
In December 2022, the FASB issued ASU 2022-06, “Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848” that extends the period of time preparers can utilize the reference rate reform relief guidance. In 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting” which provides optional guidance to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. The objective of the guidance in Topic 848 is to provide relief during the temporary transition period, so the FASB included a sunset provision within Topic 848 based on expectations of when LIBOR would cease being published. In 2021, the UK Financial Conduct Authority delayed the intended cessation date of certain tenors of USD LIBOR to June 30, 2023. To ensure the relief in Topic 848 covers the period of time during which a significant number of modifications may take place, ASU 2022-06 defers the sunset date of Topic 848 from December 31, 2022 to December 31, 2024, after which entities will no longer be permitted to apply the relief in Topic 848. For all entities, the amendments in ASU 2022-06 are effective upon issuance. The Company adopted this ASU on December 21, 2022 on a prospective basis; therefore, there was no impact to its consolidated financial statements upon adoption.
In March 2022, the FASB issued ASU 2022-01, “Derivatives and Hedging (Topic 815): Fair Value Hedging - Portfolio Layer Method” which clarifies the guidance in ASC 815 on fair value hedge accounting of interest rate risk for portfolios of financial assets. This ASU amends the guidance in ASU 2017-12 (released in August 2017) that, among other things, established the last-of-layer method to enable fair value hedge accounting for these portfolios to be more accessible. ASU 2022-01 expands the current last-of-layer method to allow multiple hedged layers of a single closed portfolio under this method. To reflect that expansion, the last-of-layer method is renamed the portfolio layer method. The scope of last-of-layer hedging will be expanded so that the portfolio layer method can be utilized for nonprepayable financial assets. In addition, ASU 2022-01 specifies eligible hedging instruments in a single-layer hedge, provides additional guidance on the accounting for and disclosure of hedge basis adjustments under the portfolio layer method, and specifies how hedge basis adjustments should be considered when determining credit losses for the assets included in the closed portfolio. For public business entities, the amendments in ASU 2022-01 are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022. Early adoption is permitted on any date on or after the issuance of ASU 2022-01 for any entity that has adopted the amendments in ASU 2017-12 for the corresponding period. The Company adopted this ASU on July 1, 2022 on a prospective basis; therefore, there was no impact to its consolidated financial statements upon adoption.
4.    SECURITIES
The following tables present the amortized cost, gross unrealized gains and losses and estimated fair values for available for sale securities and the amortized cost, gross unrecognized gains and losses and estimated fair values for held to maturity securities as of the dates indicated:
March 31, 2023
Amortized
Cost		 Gross
Unrealized
Gains		 Gross
Unrealized
Losses		 Allowance for
Credit Losses		 Fair
Value
(In Thousands)
Available for sale:        
Debt securities:        
Asset-backed securities $ 145,616  $ 22  $ 2,585  $ —  $ 143,053 
Collateralized loan obligations 388,265  172  6,500  —  381,937 
Corporate bonds 159,718  —  17,264  —  142,454 
Total debt securities 693,599  194  26,349  —  667,444 
       
Mortgage-backed securities:        
Residential pass-through securities (1)
 549,550  11  98,320  —  451,241 
Commercial pass-through securities (1)
 165,045  694  17,358  —  148,381 
Total mortgage-backed securities 714,595  705  115,678  —  599,622 
       
Total securities available for sale $ 1,408,194  $ 899  $ 142,027  $ —  $ 1,267,066 
___________________________
(1)Government-sponsored enterprises.
- 9 -
Index
June 30, 2022
Amortized
Cost		 Gross
Unrealized
Gains		 Gross
Unrealized
Losses		 Allowance for
Credit Losses		 Fair
Value
(In Thousands)
Available for sale:        
Debt securities:        
Obligations of state and political subdivisions $ 28,485  $ 39  $ 89  $ —  $ 28,435 
Asset-backed securities 169,506  —  2,949  —  166,557 
Collateralized loan obligations 315,693  —  7,880  —  307,813 
Corporate bonds 159,871  175  6,649  —  153,397 
Total debt securities 673,555  214  17,567  —  656,202 
       
Mortgage-backed securities:      
Collateralized mortgage obligations (1)
 7,451  —  329  —  7,122 
Residential pass-through securities (1)
 595,337  45  80,624  —  514,758 
Commercial pass-through securities (1)
 185,781  1  19,771  —  166,011 
Total mortgage-backed securities 788,569  46  100,724  —  687,891 
     
Total securities available for sale $ 1,462,124  $ 260  $ 118,291  $ —  $ 1,344,093 
___________________________
(1)Government-sponsored enterprises.
March 31, 2023
Amortized
Cost		 Gross
Unrecognized
Gains		 Gross
Unrecognized
Losses		 Allowance for
Credit Losses		 Fair
Value
(In Thousands)
Held to maturity:      
Debt securities:        
Obligations of state and political subdivisions $ 16,666  $ 10  $ 130  $ —  $ 16,546 
Total debt securities 16,666  10  130  —  16,546 
       
Mortgage-backed securities:        
Residential pass-through securities (1)
 120,841  114  11,642  —  109,313 
Commercial pass-through securities (1)
 12,257  —  1,991  —  10,266 
Total mortgage-backed securities 133,098  114  13,633  —  119,579 
       
Total securities held to maturity $ 149,764  $ 124  $ 13,763  $ —  $ 136,125 
___________________________
(1)Government-sponsored enterprises.
- 10 -
Index
June 30, 2022
Amortized
Cost		 Gross
Unrecognized
Gains		 Gross
Unrecognized
Losses		 Allowance for
Credit Losses		 Fair
Value
(In Thousands)
Held to maturity:
Debt securities:
Obligations of state and political subdivisions $ 21,159  $ 44  $ 78  $ —  $ 21,125 
Total debt securities 21,159  44  78  —  21,125 
   
Mortgage-backed securities:    
Residential pass-through securities (1)
 84,851  —  8,587  —  76,264 
Commercial pass-through securities (1)
 12,281  —  1,552  —  10,729 
Total mortgage-backed securities 97,132  —  10,139  —  86,993 
   
Total securities held to maturity $ 118,291  $ 44  $ 10,217  $ —  $ 108,118 
___________________________
(1)Government-sponsored enterprises.
Excluding the balances of mortgage-backed securities, the following tables present the amortized cost and estimated fair values of debt securities available for sale and held to maturity, by contractual maturity, at March 31, 2023:
March 31, 2023
Amortized
Cost		 Fair
Value
(In Thousands)
Available for sale debt securities:
Due in one year or less $ —  $ — 
Due after one year through five years 11,865  11,757 
Due after five years through ten years 350,025  331,980 
Due after ten years 331,709  323,707 
Total $ 693,599  $ 667,444 
March 31, 2023
Amortized
Cost		 Fair
Value
(In Thousands)
Held to maturity debt securities:
Due in one year or less $ 2,568  $ 2,559 
Due after one year through five years 12,399  12,286 
Due after five years through ten years 1,699  1,701 
Due after ten years —  — 
Total $ 16,666  $ 16,546 
- 11 -
Index
Sales of securities available for sale were as follows for the periods presented below:
Three Months Ended
March 31,		 Nine Months Ended
March 31,
2023 2022 2023 2022
(In Thousands)
Available for sale securities sold:
Proceeds from sales of securities $ —  $ —  $ 105,199  $ — 
Gross realized gains $ —  $ —  $ —  $ — 
Gross realized losses —  —  (15,227) — 
Net loss on sales of securities $ —  $ —  $ (15,227) $ — 
Gains resulting from calls of securities available for sale were as follows for the periods presented below:
Three Months Ended
March 31,		 Nine Months Ended
March 31,
2023 2022 2023 2022
(In Thousands)
Available for sale securities called:
Gross realized gains $ —  $ 3  $ —  $ 4 
Gross realized losses —  —  —  — 
Net gain on calls of securities $ —  $ 3  $ —  $ 4 

The carrying value of securities pledged for borrowings at the FHLB and other institutions, and securities pledged for public funds and other purposes, were as follows as of the dates presented below:
March 31,
2023		 June 30,
2022
(In Thousands)
Securities pledged:
Pledged for borrowings at the FHLB of New York $ —  $ 178,048 
Pledged to secure public funds on deposit 207,602  357,841 
Pledged for potential borrowings at the Federal Reserve Bank of New York 541,656  378,071 
Total carrying value of securities pledged $ 749,258  $ 913,960 
The following tables present the gross unrealized losses on securities and the estimated fair value of the related securities, aggregated by investment category and length of time that securities have been in a continuous unrealized loss position within the available for sale portfolio at March 31, 2023 and June 30, 2022:
March 31, 2023
Less than 12 Months   12 Months or More Total
Fair
Value		 Unrealized
Losses		 Fair
Value		 Unrealized
Losses		 Number of Securities Fair
Value		 Unrealized
Losses
(Dollars in Thousands)
Securities Available for Sale:
Asset-backed securities $ 22,203  $ 289  $ 104,001  $ 2,296  14 $ 126,204  $ 2,585 
Collateralized loan obligations 33,732  381  277,809  6,119  25 311,541  6,500 
Corporate bonds 38,792  1,695  103,662  15,569  31 142,454  17,264 
Commercial pass-through securities 17,754  107  81,590  17,251  10 99,344  17,358 
Residential pass-through securities 10,682  546  439,817  97,774  106 450,499  98,320 
Total $ 123,163  $ 3,018  $ 1,006,879  $ 139,009  186 $ 1,130,042  $ 142,027 
- 12 -
Index
June 30, 2022
Less than 12 Months 12 Months or More Total
Fair
Value		 Unrealized
Losses		 Fair
Value		 Unrealized
Losses		 Number of Securities Fair
Value		 Unrealized
Losses
(Dollars in Thousands)
Securities Available for Sale:
Obligations of state and political subdivisions $ 11,310  $ 89  $ —  $ —  30 $ 11,310  $ 89 
Asset-backed securities 161,303  2,928  5,254  21  15 166,557  2,949 
Collateralized loan obligations 236,967  6,435  70,846  1,445  24 307,813  7,880 
Corporate bonds 129,407  6,464  3,815  185  27 133,222  6,649 
Collateralized mortgage obligations 7,122  329  —  —  6 7,122  329 
Commercial pass-through securities 63,045  3,194  102,817  16,577  21 165,862  19,771 
Residential pass-through securities 237,928  26,566  274,197  54,058  106 512,125  80,624 
Total $ 847,082  $ 46,005  $ 456,929  $ 72,286  229 $ 1,304,011  $ 118,291 
The following table presents the gross unrecognized losses on securities and the estimated fair value of the related securities, aggregated by investment category and length of time that securities have been in a continuous unrecognized loss position within the held to maturity portfolio at March 31, 2023 and June 30, 2022:
March 31, 2023
Less than 12 Months 12 Months or More Total
Fair
Value		 Unrecognized
Losses		 Fair
Value		 Unrecognized
Losses		 Number of Securities Fair
Value		 Unrecognized
Losses
(Dollars in Thousands)
Securities Held to Maturity:
Obligations of state and political subdivisions $ 13,434  $ 95  $ 2,109  $ 35  32 $ 15,543  $ 130 
Commercial pass-through securities —  —  10,266  1,991  1 10,266  1,991 
Residential pass-through securities —  —  69,725  11,642  8 69,725  11,642 
     
Total $ 13,434  $ 95  $ 82,100  $ 13,668  41 $ 95,534  $ 13,763 
June 30, 2022
Less than 12 Months 12 Months or More Total
Fair
Value		 Unrecognized
Losses		 Fair
Value		 Unrecognized
Losses		 Number of Securities Fair
Value		 Unrecognized
Losses
(Dollars in Thousands)
Securities Held to Maturity:
Obligations of state and political subdivisions $ 8,681  $ 78  $ —  $ —  15 $ 8,681  $ 78 
Commercial pass-through securities 10,729  1,552  —  —  1 10,729  1,552 
Residential pass-through securities 76,264  8,587  —  —  8 76,264  8,587 
Total $ 95,674  $ 10,217  $ —  $ —  24 $ 95,674  $ 10,217 
Available for sale securities are evaluated to determine if a decline in fair value below the amortized cost basis has resulted from a credit loss or from other factors. An impairment related to credit factors would be recorded through an allowance for credit losses. The allowance is limited to the amount by which the security’s amortized cost basis exceeds the fair value. An impairment that has not been recorded through an allowance for credit losses shall be recorded through other comprehensive income, net of applicable taxes. Investment securities will be written down to fair value through the Consolidated Statement of Income if management intends to sell, or may be required to sell, the securities before they recover in value. The issuers of these securities continue to make timely principal and interest payments and none of these securities were past due or were placed in nonaccrual status at March 31, 2023. Management believes that the unrealized losses on these securities are a function of changes in market interest rates and credit spreads, not changes in credit quality. No allowance for credit losses was recorded at March 31, 2023 on available for sale securities.
- 13 -
Index
The sale of available for sale securities during the nine months ended March 31, 2023 was part of a wholesale restructuring and the proceeds were reinvested in higher yielding securities. The Company was not required to sell these securities.
At March 31, 2023, the held to maturity securities portfolio consists of agency mortgage-backed securities and obligations of state and political subdivisions. The mortgage-backed securities are issued by U.S. government agencies and are implicitly guaranteed by the U.S. government. The obligations of state and political subdivisions in the portfolio are highly rated by major rating agencies and have a long history of no credit losses. The Company regularly monitors the obligations of state and political subdivisions sector of the market and reviews collectability including such factors as the financial condition of the issuers as well as credit ratings in effect as of the reporting period. No allowance for credit losses was recorded at March 31, 2023 on held to maturity securities.
5.    LOANS RECEIVABLE
The following table sets forth the composition of the Company’s loan portfolio at March 31, 2023 and June 30, 2022:
March 31,
2023		 June 30,
2022
(In Thousands)
Commercial loans:
Multi-family mortgage $ 2,835,852  $ 2,409,090 
Nonresidential mortgage 1,002,643  1,019,838 
Commercial business 162,038  176,807 
Construction 215,524  140,131 
Total commercial loans 4,216,057  3,745,866 
One- to four-family residential mortgage 1,713,343  1,645,816 
Consumer loans:
Home equity loans 44,376  42,028 
Other consumer 2,592  2,866 
Total consumer loans 46,968  44,894 
Total loans 5,976,368  5,436,576 
Unaccreted yield adjustments (1)
 (10,043) (18,731)
Total loans receivable, net of yield adjustments $ 5,966,325  $ 5,417,845 
___________________________
(1)At March 31, 2023, included a fair value adjustment to the carrying amount of hedged one- to four-family residential mortgage loans.
Past Due Loans
Past due status is based on the contractual payment terms of the loans. The following tables present the payment status of past due loans as of March 31, 2023 and June 30, 2022, by loan segment:
Payment Status
March 31, 2023
30-59 Days 60-89 Days 90 Days and Over Total Past Due Current Total
(In Thousands)
Multi-family mortgage $ —  $ 3,940  $ 7,659  $ 11,599  $ 2,824,253  $ 2,835,852 
Nonresidential mortgage 3,842  —  5,669  9,511  993,132  1,002,643 
Commercial business —  —  264  264  161,774  162,038 
Construction —  —  —  —  215,524  215,524 
One- to four-family residential mortgage 2,961  852  2,896  6,709  1,706,634  1,713,343 
Home equity loans 51  —  47  98  44,278  44,376 
Other consumer 39  —  —  39  2,553  2,592 
Total loans $ 6,893  $ 4,792  $ 16,535  $ 28,220  $ 5,948,148  $ 5,976,368 
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Index
Payment Status
June 30, 2022
30-59 Days 60-89 Days 90 Days and Over Total Past Due Current Total
(In Thousands)
Multi-family mortgage $ 3,148  $ 3,056  $ 7,788  $ 13,992  $ 2,395,098  $ 2,409,090 
Nonresidential mortgage 4,026  —  18,132  22,158  997,680  1,019,838 
Commercial business 98  57  155  310  176,497  176,807 
Construction —  —  —  —  140,131  140,131 
One- to four-family residential mortgage 1,525  253  3,455  5,233  1,640,583  1,645,816 
Home equity loans 28  35  —  63  41,965  42,028 
Other consumer —  —  —  —  2,866  2,866 
Total loans $ 8,825  $ 3,401  $ 29,530  $ 41,756  $ 5,394,820  $ 5,436,576 
Nonperforming Loans
Loans are generally placed on nonaccrual status when contractual payments become 90 or more days past due or when the Company does not expect to receive all principal and interest payments owed substantially in accordance with the terms of the loan agreement, regardless of past due status. Loans that become 90 days past due, but are well secured and in the process of collection, may remain on accrual status. Nonaccrual loans are generally returned to accrual status when all payments due are brought current and the Company expects to receive all remaining principal and interest payments owed substantially in accordance with the terms of the loan agreement. Payments received in cash on nonaccrual loans, including both the principal and interest portions of those payments, are generally applied to reduce the carrying value of the loan. The Company did not recognize interest income on non-accrual loans during the nine months ended March 31, 2023 and 2022.
The following tables present information relating to the Company’s nonperforming loans as of March 31, 2023 and June 30, 2022:
Performance Status
March 31, 2023
90 Days and Over Past Due Accruing Nonaccrual Loans with Allowance for Credit Losses Nonaccrual Loans with no Allowance for Credit Losses Total Nonperforming Performing Total
(In Thousands)
Multi-family mortgage $ —  $ 5,762  $ 14,312  $ 20,074  $ 2,815,778  $ 2,835,852 
Nonresidential mortgage —  12,337  5,285  17,622  985,021  1,002,643 
Commercial business —  86  185  271  161,767  162,038 
Construction —  —  —  —  215,524  215,524 
One- to four-family residential mortgage —  1,025  4,984  6,009  1,707,334  1,713,343 
Home equity loans —  —  50  50  44,326  44,376 
Other consumer —  —  —  —  2,592  2,592 
Total loans $ —  $ 19,210  $ 24,816  $ 44,026  $ 5,932,342  $ 5,976,368 
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Index
Performance Status
June 30, 2022
90 Days and Over Past Due Accruing Nonaccrual Loans with Allowance for Credit Losses Nonaccrual Loans with no Allowance for Credit Losses Total Nonperforming Performing Total
(In Thousands)
Multi-family mortgage $ —  $ 8,367  $ 18,286  $ 26,653  $ 2,382,437  $ 2,409,090 
Nonresidential mortgage —  12,602  19,292  31,894  987,944  1,019,838 
Commercial business —  212  81  293  176,514  176,807 
Construction —  —  1,561  1,561  138,570  140,131 
One- to four-family residential mortgage —  3,543  4,946  8,489  1,637,327  1,645,816 
Home equity loans —  302  1,129  1,431  40,597  42,028 
Other consumer —  —  —  —  2,866  2,866 
Total loans $ —  $ 25,026  $ 45,295  $ 70,321  $ 5,366,255  $ 5,436,576 
Troubled Debt Restructurings (“TDRs”)
TDRs are loans where the Company has modified the contractual terms of the loan as a result of the financial condition of the borrower. Subsequent to their modification, TDRs are placed on non-accrual until such time as satisfactory payment performance has been demonstrated, at which time the loan may be returned to accrual status. On a case-by-case basis, the Company may agree to modify the contractual terms of a loan to assist a borrower who may be experiencing financial difficulty, as well as to preserve the Company’s position in the loan. If the borrower is experiencing financial difficulties and a concession has been made at the time of such modification, the loan is classified as a TDR. The Company had TDRs totaling $17.9 million and $22.2 million as of March 31, 2023 and June 30, 2022, respectively. The allowance for credit losses associated with the TDRs presented in the tables below totaled $295,000 and $365,000 as of March 31, 2023 and June 30, 2022, respectively. As of March 31, 2023, the Company had commitments to lend additional funds totaling $23,000 to borrowers whose loans had been restructured in a TDR.
The following tables present total TDR loans at March 31, 2023 and June 30, 2022:
March 31, 2023
Accrual Non-accrual Total
# of Loans Amount # of Loans Amount # of Loans Amount
(Dollars In Thousands)
Commercial loans:
Multi-family mortgage — $ —  2 $ 5,470  2 $ 5,470 
Nonresidential mortgage 3 177  1 384  4 561 
Commercial business 5 3,555  1 6  6 3,561 
Construction — —  — —  — — 
Total commercial loans 8 3,732 4 5,860 12 9,592
One- to four-family residential mortgage 35 6,068  9 1,848  44 7,916 
Consumer loans:
Home equity loans 6 391  — —  6 391 
Total 49 $ 10,191  13 $ 7,708  62 $ 17,899 
- 16 -
Index
June 30, 2022
Accrual Non-accrual Total
# of Loans Amount # of Loans Amount # of Loans Amount
(Dollars In Thousands)
Commercial loans:
Multi-family mortgage — $ —  2 $ 5,626  2 $ 5,626 
Nonresidential mortgage 4 389  2 1,565  6 1,954 
Commercial business 5 3,631  2 82  7 3,713 
Construction — —  1 1,561  1 1,561 
Total commercial loans 9 4,020  7 8,834  16 12,854 
One- to four-family residential mortgage 29 4,488  16 3,314  45 7,802 
Consumer loans:
Home equity loans 5 164  2 1,364  7 1,528 
Total 43 $ 8,672  25 $ 13,512  68 $ 22,184 
The following tables present information regarding TDRs that occurred during the three months and nine months ended March 31, 2023 and 2022:
Three Months Ended March 31, 2023 Three Months Ended March 31, 2022
# of Loans Pre-
modification
Recorded
Investment		 Post-
modification
Recorded
Investment		 # of Loans Pre-
modification
Recorded
Investment		 Post-
modification
Recorded
Investment
(Dollars In Thousands)
Multi-family mortgage — $ —  $ —  1 $ 9,104  $ 9,101 
Commercial business 1 67  67  — —  — 
One- to four-family residential mortgage — —  —  8 2,953  2,965 
Home equity loans — —  —  2 1,477  1,477 
Total 1 $ 67  $ 67  11 $ 13,534  $ 13,543 

Nine Months Ended March 31, 2023 Nine Months Ended March 31, 2022
# of Loans Pre-
modification
Recorded
Investment		 Post-
modification
Recorded
Investment		 # of Loans Pre-
modification
Recorded
Investment		 Post-
modification
Recorded
Investment
(Dollars In Thousands)
Multi-family mortgage — $ —  $ —  2 $ 12,091  $ 12,073 
Commercial business 2 74  74  — —  — 
One- to four-family residential mortgage 2 708  705  10 3,214  3,226 
Home equity loans 1 35  35  2 1,477  1,477 
Total 5 $ 817  $ 814  14 $ 16,782  $ 16,776 

During the three months and nine months ended March 31, 2023, there were charge-offs of $6,000 and $103,000, respectively, related to TDRs. During the three months and nine months ended March 31, 2022, there were no charge-offs related to TDRs. During the three months and nine months ended March 31, 2023, there were two TDR defaults totaling $649,000. During the three months and nine months ended March 31, 2022, there were no defaults of TDRs.
Loan modifications generally involve a reduction in interest rates and/or extension of maturity dates and also may include step up interest rates in their modified terms which will impact their weighted average yield in the future. The loans which qualified as TDRs during the three months and nine months ended March 31, 2023 and 2022, capitalized prior past due amounts and modified the repayment terms.
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Index
Individually Analyzed Loans
Individually analyzed loans include loans which do not share similar risk characteristics with other loans. TDRs will generally be evaluated for individual impairment, however, after a period of sustained repayment performance which permits the credit to be returned to accrual status, a TDR would generally be removed from individual impairment analysis and returned to its corresponding pool. As of March 31, 2023, the carrying value of individually analyzed loans, including loans acquired with deteriorated credit quality that were individually analyzed, totaled $44.0 million, of which $40.7 million were considered collateral dependent.
For collateral dependent loans where management has determined that foreclosure of the collateral is probable, or where the borrower is experiencing financial difficulty and repayment of the loan is to be provided substantially through the operation or sale of the collateral, the allowance for credit losses is measured based on the difference between the fair value of the collateral, less costs to sell, and the amortized cost basis of the loan as of the measurement date. See Note 12 for additional disclosure regarding fair value of individually analyzed collateral dependent loans.
The following table presents the carrying value and related allowance of collateral dependent individually analyzed loans at the dates indicated:
March 31, 2023 June 30, 2022
Carrying Value Related Allowance Carrying Value Related Allowance
(In Thousands)
Commercial loans:
Multi-family mortgage $ 20,074  $ 266  $ 26,653  $ 849 
Nonresidential mortgage (1)
 17,284  2,166  30,733  2,696 
Construction —  —  1,561  — 
Total commercial loans 37,358  2,432  58,947  3,545 
One- to four-family residential mortgage (2)
 3,299  —  4,305  77 
Consumer loans:
Home equity loans (2)
 —  —  35  — 
Total $ 40,657  $ 2,432  $ 63,287  $ 3,622 
___________________________
(1)Secured by income-producing nonresidential property.
(2)Secured by one- to four-family residential properties.
Credit Quality Indicators
The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company analyzes loans individually to classify the loans as to credit risk. The Company uses the following definitions for risk ratings:
Pass – Loans that are well protected by the current net worth and paying capacity of the obligor (or guarantors, if any) or by the fair value, less cost to acquire and sell, of any underlying collateral in a timely manner.
Special Mention – Loans which do not currently expose the Company to a sufficient degree of risk to warrant an adverse classification but have some credit deficiencies or other potential weaknesses.
Substandard – Loans which are inadequately protected by the paying capacity and net worth of the obligor or the collateral pledged, if any. Substandard assets include those characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected.
Doubtful – Loans which have all of the weaknesses inherent in those classified as Substandard, with the added characteristic that the weaknesses present make collection or liquidation in full highly questionable and improbable, on the basis of currently existing facts, conditions and values.
Loss – Loans which are considered uncollectible or of so little value that their continuance as assets is not warranted.
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Index
The following table presents the risk category of loans as of March 31, 2023 by loan segment and vintage year:
Term Loans by Origination Year for Fiscal Years ended June 30,
2023 2022 2021 2020 2019 Prior Revolving Loans Total
(In Thousands)
Multi-family mortgage:
Pass $ 604,750  $ 955,969  $ 234,731  $ 201,324  $ 245,571  $ 538,279  $ —  $ 2,780,624 
Special Mention —  —  —  —  6,043  6,689  —  12,732 
Substandard —  —  9,865  —  9,469  23,162  —  42,496 
Doubtful —  —  —  —  —  —  —  — 
Total multi-family mortgage 604,750  955,969  244,596  201,324  261,083  568,130  —  2,835,852 
Nonresidential mortgage:
Pass 100,886  226,384  83,630  52,276  59,582  449,241  6,000  977,999 
Special Mention —  —  —  —  —  381  —  381 
Substandard —  —  711  —  925  22,627  —  24,263 
Doubtful —  —  —  —  —  —  —  — 
Total nonresidential mortgage 100,886  226,384  84,341  52,276  60,507  472,249  6,000  1,002,643 
Commercial business:
Pass 13,025  29,649  23,154  8,852  1,831  8,342  67,093  151,946 
Special Mention —  5,141  —  —  178  2,834  —  8,153 
Substandard —  —  —  265  46  1,382  246  1,939 
Doubtful —  —  —  —  —  —  —  — 
Total commercial business 13,025  34,790  23,154  9,117  2,055  12,558  67,339  162,038 
Construction loans:
Pass 17,507  32,334  137,660  12,275  2,980  7,033  5,735  215,524 
Special Mention —  —  —  —  —  —  —  — 
Substandard —  —  —  —  —  —  —  — 
Doubtful —  —  —  —  —  —  —  — 
Total construction loans 17,507  32,334  137,660  12,275  2,980  7,033  5,735  215,524 
Residential mortgage:
Pass 170,816  459,680  501,615  82,492  46,589  439,128  —  1,700,320 
Special Mention —  —  —  —  1,176  1,053  —  2,229 
Substandard —  549  —  —  80  10,165  —  10,794 
Doubtful —  —  —  —  —  —  —  — 
Total residential mortgage 170,816  460,229  501,615  82,492  47,845  450,346  —  1,713,343 
Home equity loans:
Pass 7,652  2,627  622  1,321  2,575  7,763  21,419  43,979 
Special Mention —  —  —  —  —  —  —  — 
Substandard —  —  —  —  93  304  —  397 
Doubtful —  —  —  —  —  —  —  — 
Total home equity loans 7,652  2,627  622  1,321  2,668  8,067  21,419  44,376 
Other consumer loans
Pass 338  262  125  452  325  969  44  2,515 
Special Mention —  —  —  —  —  —  —  — 
Substandard —  —  —  —  —  —  —  — 
Doubtful —  —  —  —  —  —  77  77 
Other consumer loans 338  262  125  452  325  969  121  2,592 
Total loans $ 914,974  $ 1,712,595  $ 992,113  $ 359,257  $ 377,463  $ 1,519,352  $ 100,614  $ 5,976,368 
- 19 -
Index
The following table presents the risk category of loans as of June 30, 2022 by loan segment and vintage year:
Term Loans by Origination Year for Fiscal Years ended June 30,
2022 2021 2020 2019 2018 Prior Revolving Loans Total
(In Thousands)
Multi-family mortgage:
Pass $ 963,263  $ 250,385  $ 211,101  $ 264,174  $ 248,058  $ 438,642  $ —  $ 2,375,623 
Special Mention —  —  —  —  —  6,814  —  6,814 
Substandard —  —  —  9,821  5,935  10,897  —  26,653 
Doubtful —  —  —  —  —  —  —  — 
Total multi-family mortgage 963,263  250,385  211,101  273,995  253,993  456,353  —  2,409,090 
Nonresidential mortgage:
Pass 231,777  87,309  53,983  60,714  49,285  491,849  6,052  980,969 
Special Mention —  —  —  —  —  591  —  591 
Substandard —  720  —  933  4,026  32,599  —  38,278 
Doubtful —  —  —  —  —  —  —  — 
Total nonresidential mortgage 231,777  88,029  53,983  61,647  53,311  525,039  6,052  1,019,838 
Commercial business:
Pass 46,888  38,791  12,155  3,581  4,861  6,455  58,662  171,393 
Special Mention —  —  62  186  2,173  873  215  3,509 
Substandard —  38  319  —  1,347  61  58  1,823 
Doubtful —  —  —  —  —  80  2  82 
Total commercial business 46,888  38,829  12,536  3,767  8,381  7,469  58,937  176,807 
Construction loans:
Pass 16,407  95,526  10,337  3,039  6,509  1,017  5,735  138,570 
Special Mention —  —  —  —  —  —  —  — 
Substandard —  —  —  —  —  1,561  —  1,561 
Doubtful —  —  —  —  —  —  —  — 
Total construction loans 16,407  95,526  10,337  3,039  6,509  2,578  5,735  140,131 
Residential mortgage:
Pass 472,160  524,163  88,645  49,316  55,139  442,517  374  1,632,314 
Special Mention —  —  —  1,205  —  621  —  1,826 
Substandard —  —  —  83  —  11,593  —  11,676 
Doubtful —  —  —  —  —  —  —  — 
Total residential mortgage 472,160  524,163  88,645  50,604  55,139  454,731  374  1,645,816 
Home equity loans:
Pass 3,197  692  1,681  3,117  2,027  7,321  22,334  40,369 
Special Mention —  —  —  —  —  —  —  — 
Substandard —  —  —  120  —  1,539  —  1,659 
Doubtful —  —  —  —  —  —  —  — 
Total home equity loans 3,197  692  1,681  3,237  2,027  8,860  22,334  42,028 
Other consumer loans
Pass 442  308  471  375  258  895  34  2,783 
Special Mention —  —  —  —  —  —  —  — 
Substandard —  —  —  —  —  —  —  — 
Doubtful —  —  —  —  —  —  83  83 
Other consumer loans 442  308  471  375  258  895  117  2,866 
Total loans $ 1,734,134  $ 997,932  $ 378,754  $ 396,664  $ 379,618  $ 1,455,925  $ 93,549  $ 5,436,576 
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Index
Mortgage Loans in Foreclosure
The Company may obtain physical possession of one- to four-family real estate collateralizing a residential mortgage loan or nonresidential real estate collateralizing a nonresidential mortgage loan via foreclosure or through an in-substance repossession. As of March 31, 2023, the Company held two single-family properties with an aggregate carrying value of $454,000 and one nonresidential property with a carrying value of $13.0 million in other real estate owned that were acquired through foreclosure on residential mortgage loans and a nonresidential mortgage loan, respectively. As of that same date, the Company held five residential mortgage loans with aggregate carrying values totaling $950,000 and six commercial mortgage loans with aggregate carrying values totaling $9.3 million which were in the process of foreclosure. As of June 30, 2022, the Company held one single-family property in other real estate owned with an aggregate carrying value of $178,000 that was acquired through a foreclosure on a residential mortgage loan. As of that same date, the Company held seven residential mortgage loans with aggregate carrying values totaling $1.5 million which were in the process of foreclosure.
6.    ALLOWANCE FOR CREDIT LOSSES
Allowance for Credit Losses on Loans Receivable
The following tables present the balance of the allowance for credit losses at March 31, 2023 and June 30, 2022. The balance of the allowance for credit losses is based on an expected loss methodology, referred to as the “CECL” methodology. The tables identify the valuation allowances attributable to specifically identified impairments on individually analyzed loans, including those acquired with deteriorated credit quality, as well as valuation allowances for impairments on loans collectively evaluated. The tables include the underlying balance of loans receivable applicable to each category as of those dates.
Allowance for Credit Losses
March 31, 2023
Loans
acquired with
deteriorated
credit quality
individually
analyzed		 Loans
acquired with
deteriorated
credit quality
collectively
evaluated		 Loans individually
analyzed		 Loans collectively
evaluated		 Total allowance for credit losses
(In Thousands)
Multi-family mortgage $ —  $ —  $ 266  $ 26,906  $ 27,172 
Nonresidential mortgage —  74  2,166  6,004  8,244 
Commercial business —  4  18  1,707  1,729 
Construction —  —  —  1,316  1,316 
One- to four-family residential mortgage —  165  57  10,043  10,265 
Home equity loans —  —  —  327  327 
Other consumer —  —  —  69  69 
Total loans $ —  $ 243  $ 2,507  $ 46,372  $ 49,122 
Balance of Loans Receivable
March 31, 2023
Loans
acquired with
deteriorated
credit quality
individually
analyzed		 Loans
acquired with
deteriorated
credit quality
collectively
evaluated		 Loans individually
analyzed		 Loans collectively
evaluated		 Total loans
(In Thousands)
Multi-family mortgage $ —  $ —  $ 20,074  $ 2,815,778  $ 2,835,852 
Nonresidential mortgage 338  3,629  17,284  981,392  1,002,643 
Commercial business —  3,964  271  157,803  162,038 
Construction —  5,735  —  209,789  215,524 
One- to four-family residential mortgage 69  5,260  5,940  1,702,074  1,713,343 
Home equity loans 25  53  25  44,273  44,376 
Other consumer —  —  —  2,592  2,592 
Total loans $ 432  $ 18,641  $ 43,594  $ 5,913,701  $ 5,976,368 
Unaccreted yield adjustments (10,043)
Loans receivable, net of yield adjustments $ 5,966,325 
- 21 -
Index
Allowance for Credit Losses
June 30, 2022
Loans
acquired with
deteriorated
credit quality
individually
analyzed		 Loans
acquired with
deteriorated
credit quality
collectively
evaluated		 Loans individually
analyzed		 Loans collectively
evaluated		 Total allowance for credit losses
(In Thousands)
Multi-family mortgage $ —  $ —  $ 849  $ 24,472  $ 25,321 
Nonresidential mortgage —  73  2,696  7,821  10,590 
Commercial business —  9  16  1,767  1,792 
Construction —  —  —  1,486  1,486 
One- to four-family residential mortgage —  229  148  7,163  7,540 
Home equity loans 26  —  —  219  245 
Other consumer —  —  —  84  84 
Total loans $ 26  $ 311  $ 3,709  $ 43,012  $ 47,058 
Balance of Loans Receivable
June 30, 2022
Loans
acquired with
deteriorated
credit quality
individually
analyzed		 Loans
acquired with
deteriorated
credit quality
collectively
evaluated		 Loans individually
analyzed		 Loans collectively
evaluated		 Total loans
(In Thousands)
Multi-family mortgage $ —  $ —  $ 26,653  $ 2,382,437  $ 2,409,090 
Nonresidential mortgage 377  5,033  31,517  982,911  1,019,838 
Commercial business —  1,267  293  175,247  176,807 
Construction —  5,735  1,561  132,835  140,131 
One- to four-family residential mortgage 87  6,460  8,402  1,630,867  1,645,816 
Home equity loans 329  58  1,102  40,539  42,028 
Other consumer —  —  —  2,866  2,866 
Total loans $ 793  $ 18,553  $ 69,528  $ 5,347,702  $ 5,436,576 
Unaccreted yield adjustments (18,731)
Loans receivable, net of yield adjustments $ 5,417,845 
The following tables present the activity in the allowance for credit losses on loans for the three months and nine months ended March 31, 2023 and 2022.
Changes in the Allowance for Credit Losses
Three Months Ended March 31, 2023
Balance at
December 31, 2022		 Charge-offs Recoveries (Reversal of)
provision for
credit losses 		Balance at
March 31, 2023
(In Thousands)
Multi-family mortgage $ 27,498  $ (4) $ —  $ (322) $ 27,172 
Nonresidential mortgage 8,593  (6) —  (343) 8,244 
Commercial business 1,819  (205) 7  108  1,729 
Construction 1,201  —  —  115  1,316 
One- to four-family residential mortgage 9,355  —  2  908  10,265 
Home equity loans 339  —  —  (12) 327 
Other consumer 72  —  —  (3) 69 
Total loans $ 48,877  $ (215) $ 9  $ 451  $ 49,122 

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Index
Changes in the Allowance for Credit Losses
Nine Months Ended March 31, 2023
Balance at
June 30, 2022		 Charge-offs Recoveries Provision for
(reversal of)
credit losses 		Balance at
March 31, 2023
(In Thousands)
Multi-family mortgage $ 25,321  $ (399) $ —  $ 2,250  $ 27,172 
Nonresidential mortgage 10,590  (21) —  (2,325) 8,244 
Commercial business 1,792  (338) 24  251  1,729 
Construction 1,486  —  —  (170) 1,316 
One- to four-family residential mortgage 7,540  —  2  2,723  10,265 
Home equity loans 245  —  —  82  327 
Other consumer 84  —  4  (19) 69 
Total loans $ 47,058  $ (758) $ 30  $ 2,792  $ 49,122 

Changes in the Allowance for Credit Losses
Three Months Ended March 31, 2022
Balance at
December 31, 2021		 Charge-offs Recoveries Reversal of
credit losses		 Balance at
March 31, 2022
(In Thousands)
Multi-family mortgage $ 25,795  $ —  $ —  $ (1,568) $ 24,227 
Nonresidential mortgage 10,078  (441) —  (598) 9,039 
Commercial business 1,903  —  4  (182) 1,725 
Construction 1,441  —  —  (167) 1,274 
One- to four-family residential mortgage 8,601  —  —  (1,323) 7,278 
Home equity loans 308  —  —  (72) 236 
Other consumer 90  —  1  (10) 81 
Total loans $ 48,216  $ (441) $ 5  $ (3,920) $ 43,860 

Changes in the Allowance for Credit Losses
Nine Months Ended March 31, 2022
Balance at June 30, 2021 Charge-offs Recoveries (Reversal of)
provision for
credit losses 		Balance at
March 31, 2022
(In Thousands)
Multi-family mortgage $ 28,450  $ (104) $ —  $ (4,119) $ 24,227 
Nonresidential mortgage 16,243  (2,538) —  (4,666) 9,039 
Commercial business 2,086  (175) 105  (291) 1,725 
Construction 1,170  —  —  104  1,274 
One- to four-family residential mortgage 9,747  —  147  (2,616) 7,278 
Home equity loans 433  —  1  (198) 236 
Other consumer 36  (2) 1  46  81 
Total loans $ 58,165  $ (2,819) $ 254  $ (11,740) $ 43,860 

Allowance for Credit Losses on Off Balance Sheet Commitments
The following table presents the activity in the allowance for credit losses on off balance sheet commitments recorded in other non-interest expense for the three months and nine months ended March 31, 2023 and 2022:
Three Months Ended
March 31,		 Nine Months Ended
March 31,
2023 2022 2023 2022
(In Thousands) (In Thousands)
Balance at beginning of the period $ 819  $ 1,148  $ 1,041  $ 1,708 
Reversal of credit losses (90) (208) (312) (768)
Balance at end of the period $ 729  $ 940  $ 729  $ 940 
- 23 -
Index
7.    DEPOSITS
Deposits at March 31, 2023 and June 30, 2022 are summarized as follows:
March 31,
2023		 June 30,
2022
(In Thousands)
Non-interest-bearing demand $ 617,778  $ 653,899 
Interest-bearing demand 2,285,799  2,265,597 
Savings 811,483  1,053,198 
Certificates of deposits 2,088,344  1,889,562 
Total deposits $ 5,803,404  $ 5,862,256 
8.    BORROWINGS
Borrowings at March 31, 2023 and June 30, 2022 consisted of the following:
March 31,
2023		 June 30,
2022
(In Thousands)
FHLB advances $ 1,156,692  $ 651,337 
Overnight borrowings (1)
 455,000  250,000 
Total borrowings $ 1,611,692  $ 901,337 
___________________________
(1)At March 31, 2023, represents $385.0 million of FHLB overnight line of credit borrowings and $70.0 million of unsecured overnight borrowings from other financial institutions. At June 30, 2022, represents FHLB overnight line of credit borrowings.
Fixed rate advances from the FHLB of New York mature as follows:
March 31, 2023 June 30, 2022
Balance Weighted
Average
Interest Rate		 Balance Weighted
Average
Interest Rate
(Dollars in Thousands)
By remaining period to maturity:
Less than one year $ 825,000  5.08  % $ 520,000  2.04  %
One to two years 103,500  2.65  22,500  2.63 
Two to three years 29,000  2.77  103,500  2.68 
Three to four years —  —  6,500  2.82 
Four to five years 200,000  3.98  —  — 
Greater than five years —  —  —  — 
Total advances 1,157,500  4.61  % 652,500  2.17  %
Unamortized fair value adjustments (808) (1,163)
Total advances, net of fair value adjustments $ 1,156,692  $ 651,337 
At March 31, 2023, FHLB advances and overnight line of credit borrowings were collateralized by the FHLB capital stock owned by the Bank and mortgage loans with carrying values totaling approximately $4.52 billion. At June 30, 2022, FHLB advances and overnight line of credit borrowings were collateralized by the FHLB capital stock owned by the Bank and mortgage loans and securities with carrying values totaling approximately $3.58 billion and $178.0 million, respectively.
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Index
9.    DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
Risk Management Objective of Using Derivatives
The Company uses various financial instruments, including derivatives, to manage its exposure to interest rate risk. The Company’s derivative financial instruments are used to manage differences in the amount, timing, and duration of the Company’s known or expected cash receipts and its known or expected cash payments principally related to specific wholesale funding positions and assets.
Fair Values of Derivative Instruments on the Statement of Financial Condition
The tables below present the fair value of the Company’s derivative financial instruments as well as their classification on the Statements of Financial Condition as of March 31, 2023 and June 30, 2022:
March 31, 2023
Asset Derivatives Liability Derivatives
Location Fair Value Location Fair Value
(In Thousands)
Derivatives designated as hedging instruments:
Interest rate contracts Other assets $ 47,816  Other liabilities $ 7,847 
Total $ 47,816  $ 7,847 

June 30, 2022
Asset Derivatives Liability Derivatives
Location Fair Value Location Fair Value
(In Thousands)
Derivatives designated as hedging instruments:
Interest rate contracts Other assets $ 41,223  Other liabilities $ — 
Total $ 41,223  $ — 
Cash Flow Hedges of Interest Rate Risk
The Company’s uses derivatives to add stability to interest expense and interest income and to manage its exposure to interest rate movements. The Company has entered into interest rate swaps, interest rate caps and an interest rate floor as part of its interest rate risk management strategy. These interest rate products are designated as cash flow hedges. As of March 31, 2023, the Company had a total of 12 interest rate swaps and caps with a total notional amount of $1.33 billion hedging specific wholesale funding and one interest rate floor with a notional amount of $100.0 million hedging floating-rate available for sale securities.
For derivatives designated as cash flow hedges, the gain or loss on the derivative is recorded in other comprehensive income (loss), net of tax, and subsequently reclassified into interest expense in the same period during which the hedged transaction affects earnings.
For cash flow hedges on the Company’s wholesale funding positions, amounts reported in accumulated other comprehensive income (loss) related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s hedged variable rate wholesale funding positions. During the three months and nine months ended March 31, 2023, the Company reclassified $6.5 million and $12.2 million, respectively, as a reduction in interest expense. During the next twelve months, the Company estimates that $25.9 million will be reclassified as a reduction in interest expense.
For cash flow hedges on the Company’s assets, amounts reported in accumulated other comprehensive income (loss) related to derivatives will be reclassified to interest income as interest payments are received on the Company’s hedged variable rate assets. During the three months and nine months ended March 31, 2023, the Company did not reclassify any amount to interest income. During the next twelve months, the Company estimates that $196,000 will be reclassified as a reduction in interest income.
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Index
The table below presents the pre-tax effects of the Company’s derivative instruments designated as cash flow hedges on the Consolidated Statements of Income for the three months and nine months ended March 31, 2023 and 2022:
Three Months Ended
March 31,		 Nine Months Ended
March 31,
2023 2022 2023 2022
(In Thousands)
Amount of (loss) gain recognized in other comprehensive income $ (8,936) $ 23,343  $ 11,051  $ 28,607 
Amount of gain (loss) reclassified from accumulated other comprehensive income to interest expense 6,461  (1,268) 12,185  (4,271)
Fair Value Hedges of Interest Rate Risk
The Company is exposed to changes in the fair value of certain of its fixed-rate assets due to changes in benchmark interest rates. The Company uses interest rate swaps to manage its exposure to changes in fair value on these instruments attributable to changes in the designated benchmark interest rate. Interest rate swaps designated as fair value hedges involve the payment of fixed-rate amounts to a counterparty in exchange for the Company receiving variable-rate payments over the life of the agreements without the exchange of the underlying notional amount. Such derivatives are used to hedge the changes in fair value of certain of its pools of fixed rate assets. As of March 31, 2023, the Company had three interest rate swaps with a notional amount of $500.0 million hedging fixed-rate residential mortgage loans.
For derivatives designated and that qualify as fair value hedges, the gain or loss on the derivatives as well as the offsetting loss or gain on the hedged item attributable to the hedged risk are recognized in interest income.
The table below presents the effects of the Company’s derivative instruments designated as fair value hedges on the Consolidated Statements of Income for the three months and nine months ended March 31, 2023. There were no fair value hedges for the three months and nine months ended March 31, 2022:
Three Months Ended
March 31,		 Nine Months Ended
March 31,
2023 2023
(In Thousands)
Gain on hedged items recorded in interest income on loans $ 5,681  $ 653 
(Loss) gain on hedge recorded in interest income on loans (4,521) 589 
As of March 31, 2023, the following amounts were recorded on the Statement of Financial Condition related to cumulative basis adjustment for fair value hedges. There were no fair value hedges at June 30, 2022:
March 31,
2023
(In Thousands)
Loans receivable:
Carrying amount of the hedged assets(1)
 $ 500,653 
Fair value hedging adjustment included in the carrying amount of the hedged assets 653 
___________________________________
(1)This amount includes the amortized cost basis of the closed portfolios of loans receivable used to designate hedging relationships in which the hedged item is the stated amount of assets in the closed portfolios anticipated to be outstanding for the designated hedge period. At March 31, 2023, the amortized cost basis of the closed portfolios used in these hedging relationships was $845.5 million.
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Index
Offsetting Derivatives
The tables below present a gross presentation, the effects of offsetting, and a net presentation of the Company’s derivatives in the Consolidated Statements of Financial Condition as of March 31, 2023 and June 30, 2022, respectively. The net amounts presented for derivative assets or liabilities can be reconciled to the tabular disclosure of fair value. The tabular disclosure of fair value provides the location that derivative assets and liabilities are presented on the Consolidated Statements of Financial Condition.
March 31, 2023
Gross Amounts Not Offset
Gross Amount Recognized Gross Amounts Offset Net Amounts Presented Financial Instruments Cash Collateral Received (Posted) Net Amount
(In Thousands)
Assets:
Interest rate contracts $ 50,397  $ (2,581) $ 47,816  $ —  $ —  $ 47,816 
Total $ 50,397  $ (2,581) $ 47,816  $ —  $ —  $ 47,816 
Liabilities:
Interest rate contracts $ 10,428  $ (2,581) $ 7,847  $ —  $ (6,130) $ 1,717 
Total $ 10,428  $ (2,581) $ 7,847  $ —  $ (6,130) $ 1,717 
June 30, 2022
Gross Amounts Not Offset
Gross Amount Recognized Gross Amounts Offset Net Amounts Presented Financial Instruments Cash Collateral Received (Posted) Net Amount
(In Thousands)
Assets:
Interest rate contracts $ 41,223  $ —  $ 41,223  $ —  $ —  $ 41,223 
Total $ 41,223  $ —  $ 41,223  $ —  $ —  $ 41,223 
Credit Risk-Related Contingent Features
The Company has agreements with each of its derivative counterparties that contain a provision where if the Company defaults on any of its indebtedness, then the Company could also be declared in default on its derivative obligations and could be required to terminate its derivative positions with the counterparty. The Company also has agreements with its derivative counterparties that contain a provision where if the Company fails to maintain its status as a well-capitalized institution, then the Company could be required to terminate its derivative positions with the counterparty. At March 31, 2023, the termination value of derivatives in a net liability position, which includes accrued interest but excludes any adjustment for nonperformance risk, related to those agreements was $7.7 million. As required under the enforceable master netting arrangement with its derivatives counterparties, at March 31, 2023, the Company posted financial collateral of $6.1 million that was not included as an offsetting amount.
In addition to the derivative instruments noted above, the Company’s pipeline of loans held for sale at March 31, 2023 and June 30, 2022, included $14.9 million and $20.3 million, respectively, of in process loans whose terms included interest rate locks to borrowers, which are considered free-standing derivative instruments whose fair values are not material to the Company’s financial condition or results of operations.
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Index
10.    BENEFIT PLANS
Components of Net Periodic Expense
The following table sets forth the aggregate net periodic benefit expense for the Bank’s Benefit Equalization Plan, Postretirement Welfare Plan, Directors’ Consultation and Retirement Plan, Atlas Bank Retirement Income Plan and Supplemental Executive Retirement Plan:
Three Months Ended
March 31,		 Nine Months Ended
March 31,		 Affected Line Item in the Consolidated Statements of Income
2023 2022 2023 2022
(In Thousands)
Service cost $ 24  $ 136  $ 258  $ 412  Salaries and employee benefits
Interest cost 88  70  280  208  Other expense
(Accretion) amortization of unrecognized (gain) loss (6) 20  (18) 60  Other expense
Expected return on assets (25) (27) (75) (83) Other expense
Net periodic benefit cost $ 81  $ 199  $ 445  $ 597 
2021 Equity Incentive Plan
During the nine months ended March 31, 2023, the Company granted 323,218 restricted stock units (“RSUs”) comprised of 238,121 service-based RSUs and 85,097 performance-based RSUs. The service-based RSUs will vest in three tranches over a period of three years and the performance-based RSUs will cliff vest upon the achievement of performance measures over the three-year period ending June 30, 2025. The number of performance-based RSUs that will vest, if any, will depend on whether, and to what extent, the performance measures are achieved. Common stock will be issued from authorized shares upon the vesting of the RSUs.
11.    INCOME TAXES
The following table presents a reconciliation between the reported income taxes for the periods presented and the income taxes which would be computed by applying the federal income tax rate of 21% to income for the three months and nine months ended March 31, 2023 and 2022:
Three Months Ended
March 31,		 Nine Months Ended
March 31,
2023 2022 2023 2022
(Dollars in Thousands) (Dollars in Thousands)
Income before income taxes $ 13,214  $ 24,215  $ 36,988  $ 76,772 
Statutory federal tax rate 21  % 21  % 21  % 21  %
Federal income tax expense at statutory rate $ 2,775  $ 5,085  $ 7,767  $ 16,122 
(Reduction) increase in income taxes resulting from:
Tax exempt interest (20) (66) (125) (204)
State tax, net of federal tax effect 769  1,908  2,065  6,026 
Incentive stock option compensation expense 3  3  9  42 
Income from bank-owned life insurance (332) (317) (1,469) (973)
Other items, net (293) (91) (57) (418)
Total income tax expense $ 2,902  $ 6,522  $ 8,190  $ 20,595 
Effective income tax rate 21.96  % 26.93  % 22.14  % 26.83  %
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Index
12.    FAIR VALUE OF FINANCIAL INSTRUMENTS
Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There are three levels of inputs that may be used to measure fair values:
Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.
Level 2: Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These might include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability or inputs that are derived principally from, or corroborated by, market data by correlation or other means.
Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation.
Assets Measured on a Recurring Basis:
The following methods and significant assumptions were used to estimate the fair values of the Company’s assets measured at fair value on a recurring basis at March 31, 2023 and June 30, 2022:
Investment Securities Available for Sale
The Company’s available for sale investment securities are reported at fair value utilizing Level 2 inputs. For these securities, the Company obtains fair value measurements from an independent pricing service. The fair value measurements consider observable data that may include dealer quotes, market spreads, cash flows, the U.S. Treasury yield curve, live trading levels, trade execution data, market consensus prepayment speeds, credit information and the securities’ terms and conditions, among other things. From time to time, the Company validates prices supplied by the independent pricing service by comparison to prices obtained from third-party sources or derived using internal models.
Derivatives
The Company has contracted with a third party vendor to provide periodic valuations for its interest rate derivatives to determine the fair value of its interest rate contracts. The vendor utilizes standard valuation methodologies applicable to interest rate derivatives such as discounted cash flow analysis and extensions of the Black-Scholes model. Such valuations are based upon readily observable market data and are therefore considered Level 2 valuations by the Company.
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Index
Those assets measured at fair value on a recurring basis are summarized below:
March 31, 2023
Quoted
Prices
in Active
Markets for
Identical
Assets
(Level 1)		 Significant
Other
Observable
Inputs
(Level 2)		 Significant
Unobservable
Inputs
(Level 3)		 Total
(In Thousands)
Assets:
Debt securities available for sale:
Asset-backed securities $ —  $ 143,053  $ —  $ 143,053 
Collateralized loan obligations —  381,937  —  381,937 
Corporate bonds —  142,454  —  142,454 
Total debt securities —  667,444  —  667,444 
Mortgage-backed securities available for sale:
Residential pass-through securities —  451,241  —  451,241 
Commercial pass-through securities —  148,381  —  148,381 
Total mortgage-backed securities —  599,622  —  599,622 
Total securities available for sale $ —  $ 1,267,066  $ —  $ 1,267,066 
Interest rate contracts $ —  $ 47,816  $ —  $ 47,816 
Total assets $ —  $ 1,314,882  $ —  $ 1,314,882 
Liabilities:
Interest rate contracts $ —  $ 7,847  $ —  $ 7,847 
Total liabilities $ —  $ 7,847  $ —  $ 7,847 
- 30 -
Index
June 30, 2022
Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)		 Significant
Other
Observable
Inputs
(Level 2)		 Significant
Unobservable
Inputs
(Level 3)		 Total
(In Thousands)
Assets:
Debt securities available for sale:
Obligations of state and political subdivisions $ —  $ 28,435  $ —  $ 28,435 
Asset-backed securities —  166,557  —  166,557 
Collateralized loan obligations —  307,813  —  307,813 
Corporate bonds —  153,397  —  153,397 
Total debt securities —  656,202  —  656,202 
Mortgage-backed securities available for sale:
Collateralized mortgage obligations —  7,122  —  7,122 
Residential pass-through securities —  514,758  —  514,758 
Commercial pass-through securities —  166,011  —  166,011 
Total mortgage-backed securities —  687,891  —  687,891 
Total securities available for sale $ —  $ 1,344,093  $ —  $ 1,344,093 
Interest rate contracts $ —  $ 41,223  $ —  $ 41,223 
Total assets $ —  $ 1,385,316  $ —  $ 1,385,316 
Assets Measured on a Non-Recurring Basis:
The following methods and assumptions were used to estimate the fair values of the Company’s assets measured at fair value on a non-recurring basis at March 31, 2023 and June 30, 2022:
Individually Analyzed Collateral Dependent Loans
The fair value of collateral dependent loans that are individually analyzed is determined based upon the appraised fair value of the underlying collateral, less costs to sell. Such collateral primarily consists of real estate and, to a lesser extent, other business assets. Management may also adjust appraised values to reflect estimated changes in market values or apply other adjustments to appraised values resulting from its knowledge of the collateral. Internal valuations may be utilized to determine the fair value of other business assets. For non-collateral-dependent loans, management estimates fair value using discounted cash flows based on inputs that are largely unobservable and instead reflect management’s own estimates of the assumptions as a market participant would in pricing such loans. Individually analyzed collateral dependent loans are considered a Level 3 valuation by the Company.
Other Real Estate Owned
Other real estate owned is recorded at estimated fair value, less estimated selling costs when acquired, thus establishing a new cost basis. Fair value is generally based on independent appraisals. These appraisals include adjustments to comparable assets based on the appraisers’ market knowledge and experience. When an asset is acquired, the excess of the loan balance over fair value, less estimated selling costs, is charged to the allowance for credit losses. If further declines in the estimated fair value of the asset occur, a write-down is recorded through expense. The valuation of foreclosed assets is subjective in nature and may be adjusted in the future because of changes in economic conditions. Other real estate owned is considered a Level 3 valuation by the Company.
- 31 -
Index
Those assets measured at fair value on a non-recurring basis are summarized below:
March 31, 2023
Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)		 Significant
Other
Observable
Inputs
(Level 2)		 Significant
Unobservable
Inputs
(Level 3)		 Total
(In Thousands)
Collateral dependent loans:
Residential mortgage $ —  $ —  $ 449  $ 449 
Multi-family mortgage —  —  7,529  7,529 
Nonresidential mortgage —  —  10,962  10,962 
Total $ —  $ —  $ 18,940  $ 18,940 
Other real estate owned, net:
Residential $ —  $ —  $ 454  $ 454 
Nonresidential —  —  12,956  12,956 
Total $ —  $ —  $ 13,410  $ 13,410 
June 30, 2022
Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)		 Significant
Other
Observable
Inputs
(Level 2)		 Significant
Unobservable
Inputs
(Level 3)		 Total
(In Thousands)
Collateral dependent loans:
Residential mortgage $ —  $ —  $ 2,035  $ 2,035 
Multi-family mortgage —  —  7,517  7,517 
Nonresidential mortgage —  —  11,479  11,479 
Total $ —  $ —  $ 21,031  $ 21,031 
Other real estate owned, net:
Residential $ —  $ —  $ 178  $ 178 
Total $ —  $ —  $ 178  $ 178 
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Index
The following tables present additional quantitative information about assets measured at fair value on a non-recurring basis and for which the Company has utilized adjusted Level 3 inputs to determine fair value:
March 31, 2023
Fair
Value		 Valuation
Techniques		 Unobservable
Input		 Range Weighted
Average
(Dollars in Thousands)
Collateral dependent loans:
Residential mortgage $ 449  Market valuation of underlying collateral
(1)
 Adjustments to reflect current conditions/selling costs
(2)
 6.92% 6.92  %
Multi-family mortgage 7,529  Market valuation of underlying collateral
(1)
 Adjustments to reflect current conditions/selling costs
(2)
10% - 12%
 10.93  %
Nonresidential mortgage 10,962  Market valuation of underlying collateral
(1)
 Adjustments to reflect current conditions/selling costs
(2)
9% - 19%
 13.95  %
Total $ 18,940 
Other real estate owned, net:
Residential $ 454  Market valuation of underlying collateral
(3)
 Adjustments to reflect current conditions/selling costs
(2)
 6.00% 6.00  %
Nonresidential 12,956  Market valuation of underlying collateral
(1)
 Adjustments to reflect current conditions/selling costs
(2)
 4.00% 4.00  %
Total $ 13,410 
June 30, 2022
Fair
Value		 Valuation
Techniques		 Unobservable
Input		 Range Weighted
Average
(Dollars in Thousands)
Collateral dependent loans:
Residential mortgage $ 2,035  Market valuation of underlying collateral
(1)
 Adjustments to reflect current conditions/selling costs
(2)
7% - 10%
 8.97  %
Multi-family mortgage 7,517  Market valuation of underlying collateral
(1)
 Adjustments to reflect current conditions/selling costs
(2)
10% - 12%
 11.06  %
Nonresidential mortgage 11,479  Market valuation of underlying collateral
(1)
 Adjustments to reflect current conditions/selling costs
(2)
9% - 18%
 12.72  %
Total $ 21,031 
Other real estate owned, net:
Residential $ 178  Market valuation of underlying collateral
(3)
 Adjustments to reflect current conditions/selling costs
(2)
 6.00% 6.00  %
Total $ 178 
___________________________________
(1)The fair value of collateral dependent loans is generally determined based on an independent appraisal of the fair value of a loan’s underlying collateral.
(2)The fair value basis of collateral dependent loans and other real estate owned is adjusted to reflect management’s estimates of selling costs including, but not limited to, real estate brokerage commissions and title transfer fees.
(3)The fair value of other real estate owned is generally determined based upon the lower of an independent appraisal of the property’s fair value or the applicable listing price or contracted sales price.
At March 31, 2023, collateral dependent loans valued using Level 3 inputs comprised loans with principal balance totaling $21.4 million and valuation allowance of $2.5 million reflecting an aggregate fair value of $18.9 million. By comparison, at June 30, 2022, collateral dependent loans valued using Level 3 inputs comprised loans with principal balance totaling $24.6 million and valuation allowance of $3.6 million reflecting an aggregate fair value of $21.0 million.
Once a loan is foreclosed, the fair value of the other real estate owned continues to be evaluated based upon the fair value of the repossessed real estate originally securing the loan. At March 31, 2023 and June 30, 2022, the Company held other real estate owned totaling $13.4 million and $178,000, respectively, whose carrying value was written down utilizing Level 3 inputs.
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Index
The following tables present the carrying amount, fair value, and placement in the fair value hierarchy of the Company’s financial instruments as of March 31, 2023 and June 30, 2022:
March 31, 2023
Carrying
Amount		 Fair
Value		 Quoted
Prices
in Active
Markets for
Identical
Assets
(Level 1)		 Significant
Other
Observable
Inputs
(Level 2)		 Significant
Unobservable
Inputs
(Level 3)
(In Thousands)
Financial assets:
Cash and cash equivalents $ 194,568  $ 194,568  $ 194,568  $ —  $ — 
Investment securities available for sale 1,267,066  1,267,066  —  1,267,066  — 
Investment securities held to maturity 149,764  136,125  —  136,125  — 
Loans held-for-sale 5,401  5,435  —  5,435  — 
Net loans receivable 5,917,203  5,489,346  —  —  5,489,346 
FHLB Stock 76,319  —  —  —  — 
Interest receivable 28,794  28,794  40  9,264  19,490 
Interest rate contracts 47,816  47,816  —  47,816  — 
Financial liabilities:
Deposits other than certificates of deposits 3,715,060  3,715,060  3,715,060  —  — 
Certificates of deposits 2,088,344  2,055,270  —  —  2,055,270 
Borrowings 1,611,692  1,608,219  —  —  1,608,219 
Interest payable on deposits 7,219  7,219  1,997  —  5,222 
Interest payable on borrowings 4,187  4,187  —  —  4,187 
Interest rate contracts 7,847  7,847  —  7,847  — 
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Index
June 30, 2022
Carrying
Amount		 Fair
Value		 Quoted
Prices
in Active
Markets for
Identical
Assets
(Level 1)		 Significant
Other
Observable
Inputs
(Level 2)		 Significant
Unobservable
Inputs
(Level 3)
(In Thousands)
Financial assets:
Cash and cash equivalents $ 101,615  $ 101,615  $ 101,615  $ —  $ — 
Investment securities available for sale 1,344,093  1,344,093  —  1,344,093  — 
Investment securities held to maturity 118,291  108,118  —  108,118  — 
Loans held-for-sale 28,874  28,831  —  28,831  — 
Net loans receivable 5,370,787  5,215,079  —  —  5,215,079 
FHLB Stock 47,144  —  —  —  — 
Interest receivable 20,466  20,466  2  5,210  15,254 
Interest rate contracts 41,223  41,223  —  41,223  — 
Financial liabilities:
Deposits other than certificates of deposits 3,972,694  3,972,694  3,972,694  —  — 
Certificates of deposits 1,889,562  1,866,341  —  —  1,866,341 
Borrowings 901,337  900,505  —  —  900,505 
Interest payable on deposits 722  722  147  —  575 
Interest payable on borrowings 1,611  1,611  —  —  1,611 
Commitments. The fair value of commitments to fund credit lines and originate or participate in loans held in portfolio or loans held for sale is estimated using fees currently charged to enter into similar agreements taking into account the remaining terms of the agreements and the present creditworthiness of the counterparties. For fixed rate loan commitments, including those relating to loans held for sale that are considered derivative instruments for financial statement reporting purposes, the fair value also considers the difference between current levels of interest and the committed rates. The carrying value, represented by the net deferred fee arising from the unrecognized commitment, and the fair value, determined by discounting the remaining contractual fee over the term of the commitment using fees currently charged to enter into similar agreements with similar credit risk, is not considered material for disclosure.
Limitations. Fair value estimates are made at a specific point in time based on relevant market information and information about the financial instruments. These estimates do not reflect any premium or discount that could result from offering for sale at one time the entire holdings of a particular financial instrument. Because no fair value exists for a significant portion of the financial instruments, fair value estimates are based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments and other factors. These estimates are subjective in nature, involve uncertainties and matters of judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates.
The fair value estimates are based on existing on-and-off balance sheet financial instruments without attempting to value anticipated future business and the value of assets and liabilities that are not considered financial instruments. Other significant assets and liabilities that are not considered financial assets and liabilities include premises and equipment, and advances from borrowers for taxes and insurance. In addition, the ramifications related to the realization of the unrealized gains and losses can have a significant effect on fair value estimates and have not been considered in any of the estimates.
Finally, reasonable comparability between financial institutions may not be likely due to the wide range of permitted valuation techniques and numerous estimates which must be made given the absence of active secondary markets for many of the financial instruments. This lack of uniform valuation methodologies introduces a greater degree of subjectivity to these estimated fair values.
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Index
13.    COMPREHENSIVE INCOME (LOSS)
The components of accumulated other comprehensive loss included in stockholders’ equity at March 31, 2023 and June 30, 2022 are as follows:
March 31,
2023		 June 30,
2022
(In Thousands)
Net unrealized loss on securities available for sale $ (141,128) $ (118,031)
Tax effect 40,713  34,104 
Net of tax amount (100,415) (83,927)
Fair value adjustments on derivatives 38,671  39,805 
Tax effect (11,214) (11,542)
Net of tax amount 27,457  28,263 
Benefit plan adjustments (134) (89)
Tax effect 39  26 
Net of tax amount (95) (63)
Total accumulated other comprehensive loss $ (73,053) $ (55,727)
Other comprehensive income (loss) and related tax effects for the three months and nine months ended March 31, 2023 and 2022 are presented in the following table:
Three Months Ended
March 31,		 Nine Months Ended
March 31,
2023 2022 2023 2022
(In Thousands)
Net unrealized holding gain (loss) on securities available for sale $ 9,713  $ (59,249) $ (38,324) $ (73,995)
Net realized (gain) loss on sale and call of securities available for sale (1)
 —  (3) 15,227  (4)
Fair value adjustments on derivatives (15,397) 24,611  (1,134) 32,878 
Benefit plans:
(Accretion) amortization of net actuarial (gain) loss (2)
 (6) 20  (18) 60 
Net actuarial loss —  —  (27) — 
Net change in benefit plan accrued expense (6) 20  (45) 60 
Other comprehensive loss before taxes (5,690) (34,621) (24,276) (41,061)
Tax effect 1,658  10,098  6,950  11,968 
Total other comprehensive loss $ (4,032) $ (24,523) $ (17,326) $ (29,093)
___________________________________
(1)Represents amounts reclassified out of accumulated other comprehensive (loss) income and included in gain on sale of securities on the Consolidated Statements of Income.
(2)Represents amounts reclassified out of accumulated other comprehensive (loss) income and included in the computation of net periodic pension expense. See Note 10 - Benefit Plans for additional information.
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Index
14.    NET INCOME PER COMMON SHARE (“EPS”)
The following schedule shows the Company’s earnings per share calculations for the periods presented:
Three Months Ended
March 31,		 Nine Months Ended
March 31,
2023 2022 2023 2022
(In Thousands, Except Per Share Data)
Net income $ 10,312  $ 17,693  $ 28,798  $ 56,177 
Weighted average number of common shares outstanding - basic 64,769  69,790  65,181  72,130 
Effect of dilutive securities 14  27  10  24 
Weighted average number of common shares outstanding - diluted 64,783  69,817  65,191  72,154 
Basic earnings per share $ 0.16  $ 0.25  $ 0.44  $ 0.78 
Diluted earnings per share $ 0.16  $ 0.25  $ 0.44  $ 0.78 
Stock options for 2,993,530 and 3,115,000 shares of common stock were not considered in computing diluted earnings per share for the three months ended March 31, 2023 and 2022, respectively, and stock options for 2,986,628 and 3,115,000 shares of common stock were not considered in computing diluted earnings per share for the nine months ended March 31, 2023 and 2022, respectively, because they were considered anti-dilutive. In addition, 427,347 RSUs were not considered in computing diluted earnings per share for the three months and nine months ended March 31, 2023, respectively, and 251,905 RSUs were not considered in computing diluted earnings per share for the three months and nine months ended March 31, 2022 because they were considered anti-dilutive.
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Index
ITEM 2.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Forward-Looking Statements
This Quarterly Report on Form 10-Q may include certain forward-looking statements based on current management expectations. Such forward-looking statements may be identified by reference to a future period or periods or by the use of forward-looking terminology, such as “may”, “will”, “believe”, “expect”, “estimate”, “anticipate”, “continue”, or similar terms or variations on those terms, or the negative of those terms. The actual results of the Company could differ materially from those management expectations. This includes statements regarding general economic conditions, the effects of the recent turmoil in the banking industry (including the failure of three financial institutions), legislative and regulatory changes, monetary and fiscal policies of the federal government, changes in tax policies, rates and regulations of federal, state and local tax authorities and failure to integrate or profitably operate acquired businesses. Additional potential factors include changes in interest rates, the rate of inflation, deposit flows, cost of funds, demand for loan products and financial services, competition and changes in the quality or composition of loan and investment portfolios of the Company. Other factors that could cause future results to vary from current management expectations include changes in accounting principles, policies or guidelines, and other economic, competitive, governmental and technological factors affecting the Company’s operations, markets, products, services and prices. Further description of the risks and uncertainties to the business are included in this Quarterly Report on Form 10-Q and in the Company’s Annual Report on Form 10-K for the year ended June 30, 2022, under “Item 1A. Risk Factors.”
Except as required by applicable law or regulation, the Company does not undertake, and specifically disclaims any obligation, to release publicly the result of any revisions that may be made to any forward-looking statements to reflect events or circumstances after the date of the statements or to reflect the occurrence of anticipated or unanticipated events.
Critical Accounting Policies
Our accounting policies are integral to understanding the results reported. We consider accounting policies that require management to exercise significant judgment or discretion or to make significant assumptions that have, or could have, a material impact on the carrying value of certain assets or on income to be critical accounting policies. At March 31, 2023, there have been no material changes to our critical accounting policies as compared to the critical accounting policies disclosed in our most recent Annual Report on Form 10-K. Reference is made to Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 10-K for the year ended June 30, 2022.
Comparison of Financial Condition at March 31, 2023 and June 30, 2022
Executive Summary. Total assets increased $629.5 million to $8.35 billion at March 31, 2023 from $7.72 billion at June 30, 2022. The increase primarily reflected increases in net loans receivable and cash and cash equivalents.
Cash and Cash Equivalents. Cash and cash equivalents increased $93.0 million to $194.6 million at March 31, 2023 from $101.6 million at June 30, 2022. The increase was driven by our decision to hold excess cash on our balance sheet due to external market conditions.
Investment Securities. Investment securities available for sale decreased $77.0 million to $1.27 billion at March 31, 2023, from $1.34 billion at June 30, 2022. This decrease was largely the result of sales of $120.4 million, principal repayments of $100.1 million and a fair value decrease of $23.1 million, partially offset by purchases of $166.5 million.
Investment securities held to maturity increased $31.5 million to $149.8 million at March 31, 2023 from $118.3 million at June 30, 2022. This increase was largely the result of purchases of $40.4 million, partially offset by principal repayments of $8.8 million.
Additional information regarding our investment securities at March 31, 2023 and June 30, 2022 is presented in Note 4 to the unaudited consolidated financial statements.
Loans Held-for-Sale. Loans held-for-sale totaled $5.4 million at March 31, 2023 as compared to $28.9 million at June 30, 2022 and are reported separately from the balance of net loans receivable. Loans held-for-sale consisted of residential mortgage loans of $5.4 million at March 31, 2023 as compared to residential mortgage loans and commercial mortgage loans of $7.1 million and $21.7 million, respectively, at June 30, 2022. During the nine months ended March 31, 2023, we sold $78.6 million of residential mortgage loans, resulting in a gain on sale of $561,000, and $24.4 million of commercial mortgage loans, resulting in a net loss on sale of $2.5 million.
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Index
Net Loans Receivable. Net loans receivable increased $546.4 million, or 10.2%, to $5.92 billion at March 31, 2023 from $5.37 billion at June 30, 2022. Details regarding the change in the loan portfolio, by loan segment, is presented below:
March 31,
2023		 June 30,
2022		 Increase/
(Decrease)
(In Thousands)
Commercial loans:
Multi-family mortgage $ 2,835,852  $ 2,409,090  $ 426,762 
Nonresidential mortgage 1,002,643  1,019,838  (17,195)
Commercial business 162,038  176,807  (14,769)
Construction 215,524  140,131  75,393 
Total commercial loans 4,216,057  3,745,866  470,191 
One- to four-family residential mortgage 1,713,343  1,645,816  67,527 
Consumer loans:
Home equity loans 44,376  42,028  2,348 
Other consumer 2,592  2,866  (274)
Total consumer loans 46,968  44,894  2,074 
Total loans 5,976,368  5,436,576  539,792 
Unaccreted yield adjustments (10,043) (18,731) 8,688 
Allowance for credit losses (49,122) (47,058) (2,064)
Net loans receivable $ 5,917,203  $ 5,370,787  $ 546,416 
Commercial loan origination volume for the nine months ended March 31, 2023 totaled $851.5 million, comprised of $708.4 million of commercial mortgage loan originations, $72.5 million of commercial business loan originations and construction loan disbursements of $70.6 million.
One- to four-family residential mortgage loan origination volume, excluding loans held-for-sale, totaled $171.8 million for the nine months ended March 31, 2023 and was supplemented with loan purchases totaling $656,000. Home equity loan and line of credit origination volume for the same period totaled $22.1 million.
Loan-to-value (“LTV”) ratios are based on current period loan balances and original appraised values at the time of origination unless a current appraisal has been obtained as a result of the loan being deemed collateral dependent and individually analyzed. The following table sets forth the composition of our real estate secured loans indicating the LTV, by loan category, at March 31, 2023 and June 30, 2022:
March 31, 2023 June 30, 2022
Balance LTV Balance LTV
(Dollars in Thousands)
Commercial mortgage loans:
Multi-family mortgage $ 2,835,852  64  % $ 2,409,090  64  %
Nonresidential mortgage 1,002,643  54  1,019,838  54 
Construction 215,524  60  140,131  61 
Total commercial mortgage loans 4,054,019  61  3,569,059  61 
One- to four-family residential mortgage 1,713,343  63  1,645,816  62 
Consumer loans:
Home equity loans 44,376  49  42,028  46 
Total mortgage loans $ 5,811,738  62  % $ 5,256,903  61  %
Additional information about our loan portfolio at March 31, 2023 and June 30, 2022 is presented in Note 5 to the unaudited consolidated financial statements.
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Index
Nonperforming Assets and TDRs. Nonperforming assets decreased by $34.8 million to $57.4 million, or 0.69% of total assets, at March 31, 2023, from $92.2 million, or 1.19% of total assets, at June 30, 2022. At March 31, 2023, we had accruing TDRs totaling $10.2 million, an increase of $1.5 million from $8.7 million at June 30, 2022. At March 31, 2023, we had non-accrual TDRs totaling $7.7 million, a decrease of $5.8 million from $13.5 million at June 30, 2022.
At March 31, 2023, nonperforming assets consisted of $44.0 million of nonperforming loans and $13.4 million of other real estate owned (“OREO”). At June 30, 2022, nonperforming assets consisted of $70.3 million of nonperforming loans, $21.7 million of non-accrual commercial loans held for sale and $178,000 of OREO.
Additional information about our nonperforming loans and TDRs at March 31, 2023 and June 30, 2022 is presented in Note 5 to the unaudited consolidated financial statements.
Allowance for Credit Losses (“ACL”). At March 31, 2023, the ACL totaled $49.1 million, or 0.82% of total loans, reflecting an increase of $2.1 million from $47.1 million, or 0.87% of total loans, at June 30, 2022. The increase during the nine months ended March 31, 2023 was largely attributable to a provision for credit losses of $2.8 million, primarily driven by loan growth, partially offset by a reduction in the expected life of the loan portfolio and a net reduction in reserves on loans individually analyzed for impairment.
Additional information about our ACL at March 31, 2023 and June 30, 2022 is presented in Note 6 to the unaudited consolidated financial statements.
Other Assets. The aggregate balance of other assets, including premises and equipment, FHLB stock, interest receivable, goodwill, core deposit intangibles, bank owned life insurance, deferred income taxes, OREO and other assets, increased $59.1 million to $815.3 million at March 31, 2023 from $756.2 million at June 30, 2022. The increase in the balance of these other assets during the nine months ended March 31, 2023 largely reflected a $29.2 million increase in FHLB stock and a $13.2 million increase in OREO. The increase in OREO was a result of our acquisition of a $13.0 million nonresidential real estate property through foreclosure. The remaining change generally reflected normal operating fluctuations within these line items.
Deposits. Total deposits decreased $58.9 million, or 1.0%, to $5.80 billion at March 31, 2023 from $5.86 billion at June 30, 2022. Included in total deposits are brokered and listing service time deposits of $761.0 million at March 31, 2023 and $773.5 million at June 30, 2022. The following table sets forth the distribution of, and changes in, deposits, by type, for the periods indicated:
March 31,
2023		 June 30,
2022		 Increase/
(Decrease)
(In Thousands)
Non-interest-bearing deposits $ 617,778  $ 653,899  $ (36,121)
Interest-bearing deposits:
Interest-bearing demand 2,285,799  2,265,597  20,202 
Savings 811,483  1,053,198  (241,715)
Certificates of deposit 2,088,344  1,889,562  198,782 
Interest-bearing deposits 5,185,626  5,208,357  (22,731)
Total deposits $ 5,803,404  $ 5,862,256  $ (58,852)
Uninsured deposits totaled $1.68 billion as of March 31, 2023 compared to $1.53 billion as of June 30, 2022. Excluding collateralized deposits of state and local governments, and deposits of the Bank’s wholly-owned subsidiary and holding company, uninsured deposits totaled $705.7 million, or 12.2% of total deposits, at March 31, 2023 compared to $792.1 million, or 13.5% of total deposits, at June 30, 2022.
Additional information about our deposits at March 31, 2023 and June 30, 2022 is presented in Note 7 to the unaudited consolidated financial statements.
Borrowings. The balance of borrowings increased by $710.4 million to $1.61 billion at March 31, 2023 from $901.3 million at June 30, 2022. The growth in borrowings funded our balance sheet growth.
At March 31, 2023, we maintained available secured borrowing capacity of $2.37 billion, of which $1.88 billion was immediately accessible via in-place collateral and $493.2 million represented the market value of unpledged securities.
Additional information about our borrowings at March 31, 2023 and June 30, 2022 is presented in Note 8 to the unaudited consolidated financial statements.
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Index
Other Liabilities. The balance of other liabilities, including advance payments by borrowers for taxes and other miscellaneous liabilities, increased $5.7 million to $68.0 million at March 31, 2023 from $62.3 million at June 30, 2022. The change in the balance of these other liabilities generally reflected normal operating fluctuations during the period.
Stockholders’ Equity. Stockholders’ equity decreased $27.8 million to $866.2 million at March 31, 2023 from $894.0 million at June 30, 2022. The decrease in stockholders’ equity during the nine months ended March 31, 2023 largely reflected cash dividends of $21.6 million and share repurchases of $21.1 million. In addition, other comprehensive loss, net of income tax, was $17.3 million, which was driven by a decline in the fair value of our available for sale securities. These items were partially offset by net income of $28.8 million.
Book value per share decreased by $0.03 to $12.99 at March 31, 2023 while tangible book value per share decreased by $0.11 to $9.79 at March 31, 2023.
On August 1, 2022, we announced that the Board of Directors had authorized a new stock repurchase plan to repurchase up to 4,000,000 shares, and the completion of our previous stock repurchase plan, which authorized the repurchase of 7,602,021 shares. During the nine months ended March 31, 2023, we repurchased 2,007,892 shares of common stock at a cost of $21.1 million, or $10.49 per share, including 1,682,747 shares, or 42.1% of the shares authorized for repurchase under the current repurchase program, at a total cost of $17.4 million or $10.37 per share.
Comparison of Operating Results for the Quarter Ended March 31, 2023 and March 31, 2022
Net Income. Net income for the quarter ended March 31, 2023 was $10.3 million, or $0.16 per diluted share, compared to $17.7 million, or $0.25 per diluted share for the quarter ended March 31, 2022. The decrease in net income reflected a decrease in net interest income, an increase in the provision for credit losses and a decrease in non-interest income, partially offset by a decrease in non-interest expense and a decrease in income tax expense.
Net Interest Income. Net interest income decreased by $5.4 million to $42.4 million for the quarter ended March 31, 2023 compared to $47.7 million for the quarter ended March 31, 2022. The decrease between the comparative periods resulted from an increase of $27.9 million in interest expense, partially offset by an increase of $22.6 million in interest income. Included in net interest income for the quarters ended March 31, 2023 and 2022, respectively, was purchase accounting accretion of $711,000 and $1.9 million, and loan prepayment penalty income of $103,000 and $1.3 million.
Net interest margin decreased 69 basis points to 2.20% for the quarter ended March 31, 2023, from 2.89% for the quarter ended March 31, 2022 and reflected increases in the cost and average balance of interest-bearing liabilities, partially offset by increases in the yield on and average balance of interest-earning assets. The increased cost of interest-bearing liabilities and yield on interest-earning assets is the result of higher market interest rates that were caused by an increase in the federal funds target rate from 0% - 0.25% in March 2022 to 4.75% - 5.00% in March 2023.
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Index
Details surrounding the composition of, and changes to, net interest income are presented in the table below which reflects the components of the average balance sheet and of net interest income for the periods indicated. We derived the average yields and costs by dividing income or expense by the average balance of assets or liabilities, respectively, for the periods presented with daily balances used to derive average balances. No tax equivalent adjustments have been made to yield or costs. Non-accrual loans were included in the calculation of average balances, however interest receivable on these loans has been fully reserved for and therefore not included in interest income. The yields and costs set forth below include the effect of deferred fees, discounts and premiums that are amortized or accreted to interest income or expense.
Three Months Ended March 31,
2023 2022
Average
Balance		 Interest Average
Yield/
Cost		 Average
Balance		 Interest Average
Yield/
Cost
(Dollars in Thousands)
Interest-earning assets:
Loans receivable (1)
 $ 5,986,669  $ 60,172  4.02  % $ 4,850,236  $ 45,846  3.78  %
Taxable investment securities (2)
 1,558,222  15,459  3.97  1,620,996  8,024  1.98 
Tax-exempt securities (2)
 17,663  99  2.23  55,390  316  2.28 
Other interest-earning assets (3)
 131,682  1,441  4.38  79,644  415  2.08 
Total interest-earning assets 7,694,236  77,171  4.01  6,606,266  54,601  3.31 
Non-interest-earning assets 575,009  601,684 
Total assets $ 8,269,245  $ 7,207,950 
Interest-bearing liabilities:
Interest-bearing demand $ 2,363,762  11,849  2.01  $ 2,133,977  1,166  0.22 
Savings 858,673  881  0.41  1,088,351  274  0.10 
Certificates of deposit 2,069,396  9,516  1.84  1,650,048  2,125  0.52 
Total interest-bearing deposits 5,291,831  22,246  1.68  4,872,376  3,565  0.29 
Federal Home Loan Bank advances 1,402,269  12,533  3.58  632,811  3,286  2.08 
Other borrowings 1,611  21  5.15  51,667  23  0.17 
Borrowings 1,403,880  12,554  3.58  684,478  3,309  1.93 
Total interest-bearing liabilities 6,695,711  34,800  2.08  5,556,854  6,874  0.49 
Non-interest-bearing liabilities (4)
 694,651  673,607 
Total liabilities 7,390,362  6,230,461 
Stockholders' equity 878,883  977,489 
Total liabilities and stockholders' equity $ 8,269,245  $ 7,207,950 
Net interest income $ 42,371  $ 47,727 
Interest rate spread (5)
 1.93  % 2.82  %
Net interest margin (6)
 2.20  % 2.89  %
Ratio of interest-earning assets to interest-bearing liabilities 1.15 1.19
___________________________________
(1)Loans held-for-sale and non-accruing loans have been included in loans receivable and the effect of such inclusion was not material. Allowance for credit losses has been included in non-interest-earning assets.
(2)Fair value adjustments have been excluded in the balances of interest-earning assets.
(3)Includes interest-bearing deposits at other banks and FHLB of New York capital stock.
(4)Includes average balances of non-interest-bearing deposits of $634.3 million and $624.2 million for the quarter ended March 31, 2023 and 2022, respectively.
(5)Interest rate spread represents the difference between the yield on interest-earning assets and the cost of interest-bearing liabilities.
(6)Net interest margin represents net interest income as a percentage of average interest-earning assets.
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Index
Provision for Credit Losses. The provision for credit losses increased $4.4 million to a provision for credit losses of $451,000 for the quarter ended March 31, 2023, compared to a reversal of credit losses of $3.9 million for the quarter ended March 31, 2022. The provision for the quarter ended March 31, 2023 was largely driven by a slower prepayment rate assumption, partially offset by a net reduction in reserves on loans individually analyzed for impairment. By comparison, the reversal for the quarter ended March 31, 2022 was largely attributable to an improvement in our economic forecast and a net reduction in reserves on loans individually analyzed for impairment.
Additional information regarding the ACL and the associated provisions recognized during the quarters ended March 31, 2023 and 2022 is presented in Note 6 to the unaudited consolidated financial statements as well as the Comparison of Financial Condition at March 31, 2023 and June 30, 2022.
Non-Interest Income. Total non-interest income decreased $1.5 million to $1.6 million for the quarter ended March 31, 2023.
Fees and service charges increased $293,000 to $910,000 for the quarter ended March 31, 2023. The increase reflected increases in various loan-related and deposit-related fees and charges.
Loss on sale of loans was $2.4 million during the quarter ended March 31, 2023 compared to a gain on sale of loans of $376,000 during the comparative period. The current period included a loss of $2.5 million that resulted from the sale of a non-performing commercial mortgage loan held-for-sale.
Other non-interest income increased $833,000 to $1.1 million for the quarter ended March 31, 2023. The increase in other non-interest income was primarily attributable to a $509,000 increase in income from investment services.
The remaining changes in the other components of non-interest income between comparative periods generally reflected normal operating fluctuations within those line items.
Non-Interest Expense. Total non-interest expense decreased $271,000 to $30.4 million for the quarter ended March 31, 2023. Non-interest expense for the quarter ended March 31, 2023 included $800,000 of branch consolidation expense, of which $250,000 was recorded in occupancy expense and $550,000 was recorded in other expense.
Salaries and employee benefits decreased $1.2 million to $18.0 million for quarter ended March 31, 2023. This decrease was primarily driven by a decrease in incentive payments tied to loan origination volume.
FDIC insurance premiums increased $1.1 million to $1.5 million for the quarter ended March 31, 2023. The increase was largely driven by asset growth.
The remaining changes in the other components of non-interest expense between comparative periods generally reflected normal operating fluctuations within those line items.
Provision for Income Taxes. Provision for income taxes decreased $3.6 million to $2.9 million for the quarter ended March 31, 2023 from $6.5 million for the quarter ended March 31, 2022.
The decrease in income tax expense reflected a lower level of pre-tax income as compared to the prior period.
Effective tax rates for the quarter ended March 31, 2023 and 2022 were 22.0% and 26.9%, respectively. The decrease in the effective tax rate was primarily due to lower full year projected taxable income.
Comparison of Operating Results for the Nine Months Ended March 31, 2023 and March 31, 2022
Net Income. Net income for the nine months ended March 31, 2023 was $28.8 million, or $0.44 per diluted share, compared to $56.2 million, or $0.78 per diluted share for the nine months ended March 31, 2022. The decrease in net income reflected a decrease in net interest income, an increase in the provision for credit losses, a decrease in non-interest income and an increase in non-interest expense, partially offset by a decrease in income tax expense.
Net Interest Income. Net interest income decreased by $10.3 million to $135.7 million for the nine months ended March 31, 2023 compared to $146.0 million for the nine months ended March 31, 2022. The decrease between the comparative periods resulted from an increase of $56.6 million in interest expense, partially offset by an increase of $46.3 million in interest income. Included in net interest income for the nine months ended March 31, 2023 and 2022, respectively, was purchase accounting accretion of $4.4 million and $7.4 million, and loan prepayment penalty income of $710,000 and $4.5 million.
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Net interest margin decreased 53 basis points to 2.42% for the nine months ended March 31, 2023, from 2.95% for the nine months ended March 31, 2022 and reflected increases in the cost and average balance of interest-bearing liabilities, partially offset by increases in the average balance of and yield on interest-earning assets. The increased cost of interest-bearing liabilities and yield on interest-earning assets is the result of higher market interest rates that were caused by an increase in the federal funds target rate from 0% - 0.25% in March 2022 to 4.75% - 5.00% in March 2023.
Details surrounding the composition of, and changes to, net interest income are presented in the table below which reflects the components of the average balance sheet and of net interest income for the periods indicated. We derived the average yields and costs by dividing income or expense by the average balance of assets or liabilities, respectively, for the periods presented with daily balances used to derive average balances. No tax equivalent adjustments have been made to yield or costs. Non-accrual loans were included in the calculation of average balances, however interest receivable on these loans has been fully reserved for and therefore not included in interest income. The yields and costs set forth below include the effect of deferred fees, discounts and premiums that are amortized or accreted to interest income or expense.
Nine Months Ended March 31,
2023 2022
Average
Balance		 Interest Average
Yield/
Cost		 Average
Balance		 Interest Average
Yield/
Cost
(Dollars in Thousands)
Interest-earning assets:
Loans receivable(1)
 $ 5,792,113  $ 171,103  3.94  % $ 4,836,189  $ 141,651  3.91  %
Taxable investment securities(2)
 1,534,083  39,119  3.40  1,627,160  23,831  1.95 
Tax-exempt securities(2)
 34,976  603  2.30  57,411  976  2.27 
Other interest-earning assets(3)
 111,150  3,207  3.85  81,078  1,261  2.07 
Total interest-earning assets 7,472,322  214,032  3.82  6,601,838  167,719  3.39 
Non-interest-earning assets 565,180  609,996 
Total assets $ 8,037,502  $ 7,211,834 
Interest-bearing liabilities:
Interest-bearing demand $ 2,359,328  $ 26,865  1.52  $ 2,037,725  $ 3,446  0.23 
Savings 937,101  2,429  0.35  1,092,738  896  0.11 
Certificates of deposit 2,092,514  22,643  1.44  1,714,448  6,951  0.54 
Total interest-bearing deposits 5,388,943  51,937  1.29  4,844,911  11,293  0.31 
Federal Home Loan Bank advances 1,011,104  25,671  3.39  655,080  10,387  2.11 
Other borrowings 43,325  739  2.28  35,292  35  0.13 
Borrowings 1,054,429  26,410  3.34  690,372  10,422  2.01 
Total interest-bearing liabilities 6,443,372  78,347  1.62  5,535,283  21,715  0.52 
Non-interest-bearing liabilities(4)
 714,233  671,935 
Total liabilities 7,157,605  6,207,218 
Stockholders' equity 879,897  1,004,616 
Total liabilities and stockholders' equity $ 8,037,502  $ 7,211,834 
Net interest income $ 135,685  $ 146,004 
Interest rate spread(5)
 2.20  % 2.87  %
Net interest margin(6)
 2.42  % 2.95  %
Ratio of interest-earning assets to interest-bearing liabilities 1.16 1.19
___________________________________
(1)Loans held-for-sale and non-accruing loans have been included in loans receivable and the effect of such inclusion was not material. Allowance for credit losses has been included in non-interest-earning assets.
(2)Fair value adjustments have been excluded in the balances of interest-earning assets.
(3)Includes interest-bearing deposits at other banks and FHLB of New York capital stock.
(4)Includes average balances of non-interest-bearing deposits of $656.4 million and $619.5 million for the nine months ended March 31, 2023 and 2022, respectively.
(5)Interest rate spread represents the difference between the yield on interest-earning assets and the cost of interest-bearing liabilities.
(6)Net interest margin represents net interest income as a percentage of average interest-earning assets.


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Index
Provision for Credit Losses. The provision for credit losses increased $14.5 million to a provision for credit losses of $2.8 million for the nine months ended March 31, 2023, compared to a reversal of credit losses of $11.7 million for the nine months ended March 31, 2022. The provision for the nine months ended March 31, 2023 was largely attributable to loan growth, partially offset by a reduction in the expected life of the loan portfolio and a net reduction in reserves on loans individually analyzed for impairment. By comparison, the reversal for the nine months ended March 31, 2022 was largely attributable to an improvement in our economic forecast, a reduction in the expected life of various segments of the loan portfolio and a net reduction in reserves on loans individually analyzed for impairment.
Additional information regarding the ACL and the associated provisions recognized during the nine months ended March 31, 2023 and 2022 is presented in Note 6 to the unaudited consolidated financial statements as well as the Comparison of Financial Condition at March 31, 2023 and June 30, 2022.
Non-Interest Income. Total non-interest income decreased $12.0 million to a loss of $915,000 for the nine months ended March 31, 2023.
Loss on sale and call of securities was $15.2 million during the nine months ended March 31, 2023 compared to a gain of $4,000 recorded during the prior comparative period. The loss was the result of a previously announced wholesale restructuring that involved the sale of $120.4 million of available for sale securities during the nine months ended March 31, 2023. The proceeds of the sale were reinvested in higher yielding securities.
Loss on sale of loans was $1.8 million for the nine months ended March 31, 2023 compared to a gain on sale of loans of $2.4 million during the comparative period. The current period included a loss of $2.5 million that resulted from the sale of a non-performing commercial mortgage loan held-for-sale. In addition, the decrease in gain on sale of loans reflected a decrease in the volume of loans sold between comparative periods.
Income from bank owned life insurance increased $2.4 million to $7.0 million for the nine months ended March 31, 2023. The increase is the result of payouts on life insurance policies.
Other non-interest income increased $4.4 million to $5.3 million for the nine months ended March 31, 2023. The increase in other non-interest income was primarily attributable to a non-recurring gain of $2.9 million from the sale of a former branch location and a $1.6 million increase in income from investment services. These increases were partially offset by $356,000 of non-recurring gains on asset disposals in the prior comparative period.
The remaining changes in the other components of non-interest income between comparative periods generally reflected normal operating fluctuations within those line items.
Non-Interest Expense. Total non-interest expense increased $2.9 million to $95.0 million for the nine months ended March 31, 2023. Non-interest expense for the nine months ended March 31, 2023 included $800,000 of branch consolidation expense, of which $250,000 was recorded in occupancy expense and $550,000 was recorded in other expense.
Salaries and employee benefits increased $2.4 million to $58.3 million for the nine months ended March 31, 2023. This increase was largely due to higher salary expense, an increase in incentive payments tied to loan origination volume and non-recurring severance expense resulting from a reduction in headcount. Partially offsetting these increases was a decrease in incentive compensation expense.
Net occupancy expense of premises decreased $1.8 million to $9.2 million for the nine months ended March 31, 2023. This decrease was primarily due to expenses recognized in the prior period including $1.5 million of non-recurring expenses related to the consolidation of three retail branch locations and an office facility and $250,000 related to facility repairs made in connection with damage incurred during Tropical Storm Ida. The current period includes $250,000 of non-recurring expenses related to the consolidation of two retail branch locations.
FDIC insurance premiums increased $2.0 million to $3.7 million for the nine months ended March 31, 2023. The increase was largely driven by asset growth.
The remaining changes in the other components of non-interest expense between comparative periods generally reflected normal operating fluctuations within those line items.
Provision for Income Taxes. Provision for income taxes decreased $12.4 million to $8.2 million for the nine months ended March 31, 2023 from $20.6 million for the nine months ended March 31, 2022.
The decrease in income tax expense reflected a lower level of pre-tax income as compared to the prior period.
Effective tax rates for the nine months ended March 31, 2023 and 2022 were 22.1% and 26.8%, respectively. The decrease in the effective tax rate was primarily due to lower full year projected taxable income, noted above, as well as non-taxable payouts on life insurance policies, noted above, during the nine months ended March 31, 2023.
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Index
Liquidity and Capital Resources
Liquidity, represented by cash and cash equivalents, is a product of operating, investing and financing activities. Our primary sources of funds are deposits, borrowings, cash flows from investment securities and loans receivable and funds provided from operations. While scheduled payments from the amortization and maturity of loans and investment securities are relatively predictable sources of funds, general interest rates, economic conditions and competition greatly influence deposit flows and prepayments on loans and securities.
At March 31, 2023, liquidity included $194.6 million of short-term cash and equivalents and $1.27 billion of investment securities available for sale. As of March 31, 2023, we had the capacity to borrow additional funds totaling $1.45 billion and $425.6 million from the FHLB of New York and FRB, respectively, without pledging additional collateral. We had the ability to pledge additional securities to borrow an additional $493.2 million at March 31, 2023. As of that same date, we also had access to unsecured overnight borrowings with other financial institutions totaling $895.0 million of which $70.0 million was outstanding.
At March 31, 2023, we had outstanding commitments to originate and purchase loans totaling $29.6 million while such commitments totaled $242.1 million at June 30, 2022. As of those same dates, our pipeline of loans held for sale included $14.9 million and $20.3 million, respectively, of loans in process whose terms included interest rate locks to borrowers that were paired with a best-efforts commitment to sell the loan to a buyer at a fixed price and within a predetermined timeframe after the sale commitment is established.
Construction loans in process and unused lines of credit were $76.8 million and $152.7 million, respectively, at March 31, 2023 compared to $109.0 million and $159.3 million, respectively, at June 30, 2022. We are also subject to the contingent liabilities resulting from letters of credit whose outstanding balances totaled $115,000 and $130,000, at March 31, 2023 and June 30, 2022, respectively.
Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee by the customer. Our exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit is represented by the contractual notional amount of those instruments. We use the same credit policies in making commitments and conditional obligations as we do for on-balance-sheet instruments. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements.
Consistent with its goals to operate a sound and profitable financial organization, the Bank actively seeks to maintain its status as a well-capitalized institution in accordance with regulatory standards.
The following table sets forth the Bank’s capital position at March 31, 2023 and June 30, 2022, as compared to the minimum regulatory capital requirements that were in effect as of those dates:
At March 31, 2023
Actual For Capital
Adequacy Purposes		 To Be Well Capitalized
Under Prompt
Corrective Action
Provisions
Amount Ratio Amount Ratio Amount Ratio
(Dollars in Thousands)
Total capital (to risk-weighted assets) $ 688,824  12.53  % $ 439,926  8.00  % $ 549,908  10.00  %
Tier 1 capital (to risk-weighted assets) 652,914  11.87  % 329,945  6.00  % 439,926  8.00  %
Common equity tier 1 capital (to risk-weighted assets) 652,914  11.87  % 247,458  4.50  % 357,440  6.50  %
Tier 1 capital (to adjusted total assets) 652,914  7.96  % 328,061  4.00  % 410,077  5.00  %
At June 30, 2022
Actual For Capital
Adequacy Purposes		 To Be Well Capitalized
Under Prompt
Corrective Action
Provisions
Amount Ratio Amount Ratio Amount Ratio
(Dollars in Thousands)
Total capital (to risk-weighted assets) $ 672,274  13.10  % $ 410,429  8.00  % $ 513,036  10.00  %
Tier 1 capital (to risk-weighted assets) 642,336  12.52  % 307,822  6.00  % 410,429  8.00  %
Common equity tier 1 capital (to risk-weighted assets) 642,336  12.52  % 230,866  4.50  % 333,473  6.50  %
Tier 1 capital (to adjusted total assets) 642,336  8.70  % 295,163  4.00  % 368,954  5.00  %
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Index
The following table sets forth the Company’s capital position at March 31, 2023 and June 30, 2022, as compared to the minimum regulatory capital requirements that were in effect as of those dates:
At March 31, 2023
Actual For Capital
Adequacy Purposes
Amount Ratio Amount Ratio
(Dollars in Thousands)
Total capital (to risk-weighted assets) $ 771,355  14.02  % $ 440,077  8.00  %
Tier 1 capital (to risk-weighted assets) 735,445  13.37  % 330,058  6.00  %
Common equity tier 1 capital (to risk-weighted assets) 735,445  13.37  % 247,543  4.50  %
Tier 1 capital (to adjusted total assets) 735,445  8.96  % 328,278  4.00  %
At June 30, 2022
Actual For Capital
Adequacy Purposes
Amount Ratio Amount Ratio
(Dollars in Thousands)
Total capital (to risk-weighted assets) $ 778,253  15.17  % $ 410,515  8.00  %
Tier 1 capital (to risk-weighted assets) 748,315  14.58  % 307,886  6.00  %
Common equity tier 1 capital (to risk-weighted assets) 748,315  14.58  % 230,914  4.50  %
Tier 1 capital (to adjusted total assets) 748,315  10.14  % 295,290  4.00  %
In March 2020, the federal banking agencies announced an interim final rule to delay the estimated impact on regulatory capital stemming from the implementation of CECL. The interim final rule provides banks the option to delay for two years an estimate of CECL’s effect on regulatory capital, relative to the incurred loss method, followed by a three-year transition period established in the previous rule (five-year transition option). We have adopted the capital transition relief over the permissible five-year period. The two-year delay ended for us as of June 30, 2022 and we then began the three-year transition period.
Off-Balance Sheet Arrangements
In the normal course of our business of investing in loans and securities we are a party to financial instruments with off-balance-sheet risk. These financial instruments include significant purchase commitments, such as commitments related to capital expenditure plans and commitments to extend credit to meet the financing needs of our customers. We had no significant off-balance sheet commitments for capital expenditures as of March 31, 2023.
Recent Accounting Pronouncements
For a discussion of the expected impact of recently issued accounting pronouncements that we have yet to adopt, please refer to Note 3 to the unaudited consolidated financial statements.
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ITEM 3.
QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
The majority of our assets and liabilities are sensitive to changes in interest rates and as such, interest rate risk is a significant form of market risk that we must manage. Interest rate risk is generally defined in regulatory nomenclature as the risk to earnings or capital arising from the movement of interest rates and arises from several risk factors including re-pricing risk, basis risk, yield curve risk and option risk. We maintain an Asset/Liability Management (“ALM”) program in order manage our interest rate risk. The program is overseen by the Board of Directors through its Interest Rate Risk Management Committee which has assigned the responsibility for the operational aspects of the ALM program to our Asset/Liability Management Committee (“ALCO”), which is comprised of various members of the senior and executive management team.
The quantitative analysis that we conduct measures interest rate risk from both a capital and earnings perspective. With regard to earnings, movements in interest rates and the shape of the yield curve significantly influence the amount of net interest income (“NII”) that we recognize. Movements in market interest rates, and the effect of such movements on the risk factors noted above, significantly influence the spread between the interest earned on our interest-earning assets and the interest paid on our interest-bearing liabilities. Our internal interest rate risk analysis calculates the sensitivity of our projected NII over a one year period utilizing a static balance sheet assumption through which incoming and outgoing asset and liability cash flows are reinvested into similar instruments. Product pricing and earning asset prepayment speeds are appropriately adjusted for each rate scenario.
With regard to capital, our internal interest rate risk analysis calculates the sensitivity of our Economic Value of Equity (“EVE”) to movements in interest rates. EVE represents the present value of the expected cash flows from our assets less the present value of the expected cash flows arising from our liabilities adjusted for the value of off-balance sheet instruments. EVE attempts to quantify our economic value using a discounted cash flow methodology. The degree to which our EVE changes for any hypothetical interest rate scenario from its base case measurement is a reflection of our sensitivity to interest rate risk.
For both earnings and capital at risk, our interest rate risk analysis calculates a base case scenario that assumes no change in interest rates. The model then measures changes throughout a series of interest rate scenarios representing immediate and permanent, parallel shifts in the yield curve up and down 100, 200 and 300 basis points with additional scenarios modeled where appropriate. The model requires that interest rates remain positive for all points along the yield curve for each rate scenario which may preclude the modeling of certain falling rate scenarios during periods of lower market interest rates. The level of interest rates prevalent at June 30, 2022 precluded the modeling of certain falling rate scenarios.
The following tables present the results of our internal EVE and NII analyses as of March 31, 2023 and June 30, 2022, respectively:
March 31, 2023
1 to 12 Months 13 to 24 Months
Change in Interest Rates EVE % Change
in EVE		 NII % Change
in NII		 NII % Change
in NII
(Dollars in Thousands)
+300 bps $ 645,799  (25.39) % $ 159,548  (6.53) % $ 173,697  (4.53) %
+200 bps 706,618  (18.37) % 162,155  (5.00) % 173,607  (4.58) %
+100 bps 801,553  (7.40) % 167,108  (2.10) % 179,522  (1.33) %
0 bps 865,599  —  170,693  —  181,948  — 
-100 bps 895,015  3.40  % 170,696  —  % 179,286  (1.46) %
-200 bps 884,083  2.14  % 168,202  (1.46) % 171,489  (5.75) %
-300 bps 893,968  3.28  % 165,561  (3.01) % 160,503  (11.79) %
June 30, 2022
1 to 12 Months 13 to 24 Months
Change in Interest Rates EVE % Change
in EVE		 NII % Change
in NII		 NII % Change
in NII
(Dollars in Thousands)
+300 bps $ 1,089,795  (15.37) % $ 178,865  (13.62) % $ 214,839  (1.68) %
+200 bps 1,156,219  (10.21) % 187,601  (9.40) % 215,528  (1.36) %
+100 bps 1,239,935  (3.71) % 198,126  (4.32) % 219,594  0.50  %
0 bps 1,287,700  —  207,069  —  218,501  — 
-100 bps 1,272,203  (1.20) % 205,241  (0.88) % 204,568  (6.38) %
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Index
There are numerous internal and external factors that may contribute to changes in our EVE and its sensitivity. Changes in the composition and allocation of our balance sheet, or utilization of off-balance sheet instruments such as derivatives, can significantly alter the exposure to interest rate risk as quantified by the changes in the EVE sensitivity measures. Changes to certain external factors, most notably changes in the level of market interest rates and overall shape of the yield curve, can also alter the projected cash flows of our interest-earning assets and interest-costing liabilities and the associated present values thereof.
Notwithstanding the rate change scenarios presented in the EVE and NII-based analyses above, future interest rates and their effect on net interest income are not predictable. Computations of prospective effects of hypothetical interest rate changes are based on numerous assumptions, including relative levels of market interest rates, prepayments and deposit run-offs and should not be relied upon as indicative of actual results. Certain shortcomings are inherent in this type of computation. Although certain assets and liabilities may have similar maturities or periods of re-pricing, they may react at different times and in different degrees to changes in market interest rates. The interest rate on certain types of assets and liabilities, such as demand deposits and savings accounts, may fluctuate in advance of changes in market interest rates, while rates on other types of assets and liabilities may lag behind changes in market interest rates. Certain assets, such as adjustable-rate mortgages, generally have features which restrict changes in interest rates on a short-term basis and over the life of the asset. In the event of a change in interest rates, prepayments and early withdrawal levels could deviate significantly from those assumed in the analyses set forth above. Additionally, an increase in credit risk may result as the ability of borrowers to service their debt may decrease in the event of an interest rate increase.
ITEM 4.
CONTROLS AND PROCEDURES
As of the end of the period covered by this Report, an evaluation was performed under the supervision and with the participation of the Company’s management, including the Chief Executive Officer and the Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended). Based on that evaluation, the Company’s management, including the Chief Executive Officer and the Chief Financial Officer, concluded that the Company’s disclosure controls and procedures were effective.
During the quarter ended March 31, 2023, there were no changes in the Company’s internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934) that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
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Index
PART II
ITEM 1.    Legal Proceedings
At March 31, 2023, neither the Company nor the Bank were involved in any pending legal proceedings other than routine legal proceedings occurring in the ordinary course of business, which involve amounts in the aggregate believed by management to be immaterial to the financial condition of the Company and the Bank.
ITEM 1A.    Risk Factors
In addition to the other information contained in this Quarterly Report on Form 10-Q, the following risk factors represent a material update and addition to the risk factors previously disclosed in our Annual Report on Form 10- K for the year ended June 30, 2022, as filed with the Securities and Exchange Commission. To the extent that any of the information contained in this Quarterly Report on Form 10-Q constitutes forward-looking statements, the risk factors set forth below also are cautionary statements identifying important factors that could cause our actual results to differ materially from those expressed in any forward-looking statements made by or on behalf of us.
Our stock price may be negatively impacted by unrelated bank failures and negative depositor confidence in depository institutions. Further, if we were unable to adequately manage our liquidity, deposits, capital levels and interest rate risk, which have come under greater scrutiny in light of recent bank failures, it may have a material adverse effect on our financial condition and results of operations.
On March 9, 2023, Silvergate Bank, La Jolla, California, announced its decision to voluntarily liquidate its assets and wind down operations. On March 10, 2023, Silicon Valley Bank, Santa Clara, California, was closed by the California Department of Financial Protection and Innovation (the “DFPI”), on March 12, 2023, Signature Bank, New York, New York, was closed by the New York State Department of Financial Services and on May 1, 2023, First Republic Bank, San Francisco, California, was closed by the DFPI, and in each case the FDIC was appointed receiver for the failed institution. These banks had elevated levels of uninsured deposits, which may be less likely to remain at the bank over time and less stable as a source of funding than insured deposits. These failures led to volatility and declines in the market for bank stocks and questions about depositor confidence in depository institutions.
These events have led to a greater focus by institutions, investors and regulators on the on-balance sheet liquidity of and funding sources for financial institutions, the composition of its deposits, including the amount of uninsured deposits, the amount of accumulated other comprehensive loss, capital levels and interest rate risk management.
If we are unable to adequately manage our liquidity, deposits, capital levels and interest rate risk, it may have a material adverse effect on our financial condition and results of operations. We must maintain sufficient funds to respond to the needs of depositors and borrowers. Deposits have traditionally been our primary source of funds for use in lending and investment activities. We also receive funds from loan repayments, investment maturities and income on other interest-earning assets. While we emphasize the generation of low-cost core deposits as a source of funding, there is strong competition for such deposits in our market area. Additionally, deposit balances can decrease if customers perceive alternative investments as providing a better risk/return tradeoff. Accordingly, as a part of our liquidity management, we must use a number of funding sources in addition to deposits and repayments and maturities of loans and investments, which may include Federal Home Loan Bank of New York advances, federal funds purchased and brokered certificates of deposit. Adverse operating results or changes in industry conditions could lead to difficulty or an inability to access these additional funding sources.
Any decline in available funding could adversely impact our ability to originate loans, invest in securities, pay our expenses, or fulfill obligations such as repaying our borrowings or meeting deposit withdrawal demands, any of which could have a material adverse impact on our liquidity, business, financial condition and results of operations.
A lack of liquidity could also attract increased regulatory scrutiny and potential restraints imposed on us by regulators. Depending on the capitalization status and regulatory treatment of depository institutions, including whether an institution is subject to a supervisory prompt corrective action directive, certain additional regulatory restrictions and prohibitions may apply, including restrictions on growth, restrictions on interest rates paid on deposits, restrictions or prohibitions on payment of dividends and restrictions on the acceptance of brokered deposits.
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Index
Our financial flexibility would be severely constrained if we were unable to maintain our access to funding or if adequate financing were not available at acceptable interest rates. Further, if we were required to rely more heavily on more expensive funding sources to support liquidity, our revenues may not increase proportionately to cover our increased costs. In this case, our operating margins and profitability would be adversely affected. If alternative funding sources were no longer available to us, we may need to sell a portion of our investment and/or loan portfolio to raise funds, which, depending upon market conditions, could result in us realizing a loss on the sale of such assets. As of March 31, 2023, we had a net unrealized loss of $141.1 million on our available-for-sale investment securities portfolio as a result of the rising interest rate environment. Our investment securities totaled $1.42 billion, or 17.0% of total assets, at March 31, 2023. The details of this portfolio are included in Note 4 to the unaudited consolidated financial statements.
The failure to address the federal debt ceiling in a timely manner, downgrades of the U.S. credit rating and uncertain credit and financial market conditions may affect the stability of securities issued or guaranteed by the federal government, which may affect the valuation or liquidity of our investment securities portfolio and increase future borrowing costs.
As a result of uncertain political, credit and financial market conditions, including the potential consequences of the federal government defaulting on its obligations for a period of time due to federal debt ceiling limitations or other unresolved political issues, investments in financial instruments issued or guaranteed by the federal government pose credit default and liquidity risks. Given that future deterioration in the U.S. credit and financial markets is a possibility, no assurance can be made that losses or significant deterioration in the fair value of our U.S. government issued or guaranteed investments will not occur. At March 31, 2023, we had $732.7 million of mortgage-backed securities issued or guaranteed by government-sponsored enterprises. Downgrades to the U.S. credit rating could affect the stability of securities issued or guaranteed by the federal government and the valuation or liquidity of our portfolio of such investment securities, and could result in our counterparties requiring additional collateral for our borrowings. Further, unless and until U.S. political, credit and financial market conditions have been sufficiently resolved or stabilized, it may increase our future borrowing costs.
ITEM 2.    Unregistered Sales of Equity Securities and Use of Proceeds
Issuer Purchases of Equity Securities:
The following table reports information regarding repurchases of the Company’s common stock during the quarter ended March 31, 2023:
Period Total Number
of Shares
Purchased		 Average Price
Paid per Share		 Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
January 1-31, 2023 — $ —  — 3,015,539
February 1-28, 2023 143,357 $ 9.95  143,357 2,872,182
March 1-31, 2023 554,929 $ 9.38  554,929 2,317,253
Total 698,286 $ 9.50  698,286 2,317,253
On August 1, 2022, the Company announced the authorization of a new stock repurchase plan to repurchase up to 4,000,000 shares. This current plan has no expiration date.
ITEM 3.    Defaults Upon Senior Securities
Not applicable.
ITEM 4. Mine Safety Disclosures The following Exhibits are filed as part of this report:
Not applicable.
ITEM 5.    Other Information
None.
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ITEM 6.    Exhibits
3.1
3.2
4
31.1
31.2
32.1
32.2
101
The following materials from the Company’s Form 10-Q for the quarter ended March 31, 2023, formatted in Inline XBRL (Extensible Business Reporting Language): (i) the Consolidated Statements of Financial Condition, (ii) the Consolidated Statements of Income; (iii) the Consolidated Statements of Comprehensive Income, (iv) the Consolidated Statements of Changes in Stockholder’s Equity, (v) the Consolidated Statements of Cash Flows and (vi) the Notes to Consolidated Financial Statements.
101.INS Inline XBRL Instance Document (The instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document)
101.SCH Inline XBRL Taxonomy Extension Schema Document
101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB Inline XBRL Taxonomy Extension Labels Linkbase Document
101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document
104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
- 52 -
Index
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
KEARNY FINANCIAL CORP.
Date: May 5, 2023
 By: /s/ Craig L. Montanaro
Craig L. Montanaro
President and Chief Executive Officer
(Principal Executive Officer)
Date: May 5, 2023
 By: /s/ Keith Suchodolski
Keith Suchodolski
Senior Executive Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)
- 53 -
EX-31.1 2 krny-20230331xexx311.htm EX-31.1 Document

Exhibit 31.1
CERTIFICATION
I, Craig L. Montanaro, certify that:
1.I have reviewed this Form 10-Q of Kearny Financial Corp.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the period presented in this report;
4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:
a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: May 5, 2023
 /s/ Craig L. Montanaro
Craig L. Montanaro
President and Chief Executive Officer
(Principal Executive Officer)

EX-31.2 3 krny-20230331xexx312.htm EX-31.2 Document

Exhibit 31.2
CERTIFICATION
I, Keith Suchodolski, certify that:
1.I have reviewed this Form 10-Q of Kearny Financial Corp.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the period presented in this report;
4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:
a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: May 5, 2023
 /s/ Keith Suchodolski
Keith Suchodolski
Senior Executive Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)

EX-32.1 4 krny-20230331xexx321.htm EX-32.1 Document

Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Kearny Financial Corp. (the “Company”) on Form 10-Q for the period ended March 31, 2023 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Craig L. Montanaro, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: May 5, 2023
 /s/ Craig L. Montanaro
Craig L. Montanaro
President and Chief Executive Officer
(Principal Executive Officer)

EX-32.2 5 krny-20230331xexx322.htm EX-32.2 Document

Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Kearny Financial Corp. (the “Company”) on Form 10-Q for the period ended March 31, 2023 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Keith Suchodolski, Senior Executive Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: May 5, 2023
 /s/ Keith Suchodolski
Keith Suchodolski
Senior Executive Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)